BUSINESS BEFORE QUESTIONS

Manchester City Council Bill [ Lords] and Bournemouth Borough Council Bill [ Lords]

Motion made, and Question (15 January) again proposed,
	That the promoters of the Manchester City Council Bill [ Lords] and Bournemouth Borough Council Bill [ Lords], which were originally introduced in the House of Lords in Session 2006-07 on 21 January 2007, may have leave to proceed with the Bills in the current Session according to the provisions of Standing Order 188B (Revival of bills).—( The Chairman of Ways and Means).

Hon. Members: Object.
	 The debate stood adjourned; to be resumed on Thursday 5 March.

Canterbury City Council Bill, Leeds City Council Bill, Nottingham City Council Bill and Reading Borough Council Bill

Motion made, and Question (15 January) again proposed,
	That the promoters of the Canterbury City Council Bill, Leeds City Council Bill, Nottingham City Council Bill and Reading Borough Council Bill, which were originally introduced in this House in Session 2007-08 on 22 January 2008, may have leave to proceed with the Bills in the current Session according to the provisions of Standing Order 188B (Revival of bills).—( The Chairman of Ways and Means).

Hon. Members: Object.
	 The debate stood adjourned; to be resumed on Thursday 5 March.

ORAL ANSWERS TO QUESTIONS

ENVIRONMENT, FOOD AND RURAL AFFAIRS

The Secretary of State was asked—

EU Floods Directive

Philip Dunne: What recent discussions he has had with the Environment Agency on the implementation of the EU floods directive.

Hilary Benn: DEFRA officials hold regular discussions with the Environment Agency on a range of matters associated with the draft floods and water Bill, which will include the implementation of the EU floods directive.

Philip Dunne: The EU floods directive is due to be implemented this September. What reassurances can the Secretary of State give to the many people who have suffered flood damage in the past couple of years in particular, including my constituents, who have suffered flood damage three or four times in that short period? What reassurance is there that the Environment Agency will be able to implement the directive on time, when there were some 200 flood risk-based vacancies in the agency only last summer?

Hilary Benn: I am well aware of the flooding that the hon. Gentleman's constituents have suffered, and the greatest reassurance that I can offer him is that since the floods of 2007, 49 schemes have been put in place, protecting 37,000 homes across the country, as I have reported to the House previously. Frankly, that is the best protection. We are putting more money into flood defence; indeed, we are bringing forward some of that investment in order to provide the protection earlier. We will be consulting on the draft floods and water Bill, which will look at how we implement the EU floods directive. Part of the work that that will require is already in train. The Bill will cover the further steps that we need to take to implement it.

David Drew: My right hon. Friend was very helpful at the time of the floods in July 2007, but we were also promised some EU funding for some of the measures that we need to put in place. It would be useful to know what money we have received from the EU and how it can be taken forward in respect of the floods and water Bill. The sooner we get that Bill in place, the better.

Hilary Benn: The question of EU funding to support the recovery effort was dealt with by my right hon. Friend the Secretary of State for Communities and Local Government. As I indicated in answer to the first question, we are significantly increasing the investment in providing defence. It is important that we do that, because it gives us the opportunity to provide more flood protection. Each scheme has to be assessed against criteria. Not all of them can go ahead, but the best thing that we can do is ensure that more money is available.

David Heath: Almost every weekend since December I have been visiting people who were affected by floods in my constituency. Is not the clear message that there needs to be a step change in our approach to flooding? We need much more emphasis on the maintenance of watercourses and drainage and much more concentration on resilience. We need to empower local communities to help themselves and we need to manage whole river catchment areas more effectively. May I invite the Secretary of State again to visit Somerset and to see for himself the problems that we face there and, perhaps, some of the solutions that have been developed locally, with which he might help?

Hilary Benn: If the hon. Gentleman will bear with me, I will do my level best to accept his invitation. Indeed, I know that he was personally caught up in the recent flooding. The truth is that the answer is all the things that he mentioned. They were all laid out clearly in Sir Michael Pitt's excellent report, as the hon. Gentleman will be aware. We have accepted all the recommendations and we are getting on with implementing them, because there is not just one solution, and local responsibility is included in that. Indeed, I am absolutely up for looking at steps that can be taken locally, both because that engenders a greater sense of responsibility in local communities about what they can do to help and because, frankly, this is a task for all of us.

Brooks Newmark: Two weeks ago, many villages in and around Braintree and Witham were once again hit by substantial flooding, which closed roads and left people stranded. Does the Secretary of State agree or at least recognise that my constituency urgently needs further investment for flood prevention, and will he commit to that investment today?

Hilary Benn: I recognise that the hon. Gentleman's constituents were affected by the flooding and I know that he wrote to my right hon. Friend the Minister of State on that question. Mercifully, the number of properties flooded across the country was relatively small and a number of the flood defence schemes that have been put in place acted to protect people in those circumstances. On investment, the Government's position is crystal clear. It would be quite helpful if the hon. Gentleman encouraged his party's new shadow spokesperson to give an equally clear commitment that it supports the investment that we are going to make up to 2010-11.

Domestic Waste Collection

Linda Gilroy: What plans he has to promote good practice in the collection of domestic waste.

Jane Kennedy: It is for local authorities to decide on the best way to collect waste in their area. They are, after all, best placed to make decisions based on local circumstances. Our role is to give them the tools to do that. It is for that reason that we fund the Waste and Resources Action Programme, among others, to provide guidance and share best practice.

Linda Gilroy: I hear what my right hon. Friend says, but in the case of Tory-controlled Plymouth city council, it took the combined efforts of myself, the shadow leader and the local councillor to get some rubbish removed for Mr. Pickford in Vauxhall street. It took more than a week, and even when he reported rat infestation, he received a flippant response. Will the Minister take an interest in ensuring that the quality of service, which was designed to be improved last November, does in fact improve?

Jane Kennedy: I am interested to hear about my hon. Friend's example. As she will know, 99 per cent. of households in Plymouth city council have a kerbside recycling collection of mixed materials, but the circumstances that she describes would be very much worse if the proposed Tory cuts to public spending were introduced. There would be a very bleak prospect indeed for all the available support—not just through WRAP, but through the recycling and organic technology advisory team and others—if the Conservatives were to come to power.

Tim Farron: The National Audit Office has warned the Government that they are set to miss their targets for reducing waste going into landfill and therefore face massive fines for failing to achieve good practice. Is it not madness that more of the funds raised by the landfill tax are not going into increasing good practice in waste collection, but are being swallowed up by the Treasury black hole? Will the Minister agree to reallocate funds from the landfill tax and further funds to local councils so that they can step down landfill and step up recycling?

Jane Kennedy: The rate of recycling in England in 1997 was 7.5 per cent.; it is now 34.5 per cent., and it is continuing to improve. The landfill tax has been a singular success and it has focused the minds of local authorities on precisely that threat of failing to reach the targets. Local authorities are working hard, and in very many cases they have got the message. I think that they should be congratulated on the progress they have made.

Eric Illsley: As my right hon. Friend knows, best practice in waste management is recycling. As she mentioned, the Government have a good record on that, but we could improve it even more. Local authorities' recycling targets are measured not by product but by weight; if we had material-specific targets, recycling could be improved, as it could if we also removed the distinction between the collection of domestic and commercial waste in some circumstances. Will the Minister revisit those issues?

Jane Kennedy: My hon. Friend will know that the waste strategy was published in 2007, and that the new economic climate in which we are operating requires us to keep all such matters under review. He has made his point in writing and at meetings. He raises an interesting point, which I will want to study further, but it is worth knowing that a lot of good work is already going on. Just this week, I visited a business in the centre of London, in Great Titchfield street. The business is called i-level; it is a digital media agency that is working with Alupro, the Aluminium Packaging Recycling Organisation, on the "Every Can Counts" initiative, which is all about the recycling of just aluminium and steel cans in a highly specific way. As I said, a lot of good work is going on, but there is always more that we can do.

Nicholas Winterton: I am concerned about the service that local authorities give to residents. Increasingly, under councils of every political colour, there is anger and criticism about how local authorities are operating refuse collection, not least regarding the move from a once-a-week to a fortnightly collection. In many cases, the size of wheelie bins has been reduced. When will local authorities take account of the interests of those paying them their wages rather than seek to meet—I say this although I do support recycling—some unacceptable regulations, many of which come from Europe?

Jane Kennedy: It is obviously a matter for local authorities to determine how local household waste is managed, how it is collected and how much recycling is undertaken. I have already described the improvements across England in respect of the proportion of household waste recycled. The hon. Gentleman's local authority may be behaving in a way that he disapproves of, but let me tell him that in my experience, because of the importance to every household of dealing with waste, this is one of the most highly political issues. It is therefore very important for local authorities to be aware of what their communities are saying.

Lynne Jones: As a busy person who manages to compost my food waste, including small bones and the mouldy stuff that we find at the back of the fridge, may I ask my right hon. Friend what incentives the Government are providing to encourage the roll-out of composting systems such as Bokashi and Green Cone, so that more domestic food waste is kept out of the waste stream and so that gardens flourish?

Jane Kennedy: It is a long time since I looked at the back of my fridge, and I dread to think what is lurking there. The recycling and organics technical advisory team is available to all local authorities in England; it provides advice on the separate collection of dry recyclables, and in particular the organic wastes that my hon. Friend describes. It is doing extremely good work. We also encourage the take-up of anaerobic digestion as an alternative means of dealing with organic waste. Again, good progress is being made by some of the big retailers, who are working with local authorities to bring organic waste into anaerobic digesters and produce some really useful products as a result.

Philip Hollobone: Kettering borough council has increased its domestic waste recycling rate from 4 per cent. to more than 45 per cent. in the past six years, but following on from the question asked by the hon. Member for Birmingham, Selly Oak (Lynne Jones), to get the figure up to 55 or 60 per cent, we need to tackle the recycling of cooked food waste, which is not allowed into the compostable waste stream. That is proving problematic. Is the Department considering any financial or other incentives to enable local authorities to deal with that particularly tricky problem, so that we can reach the sort of recycling rates to which we aspire?

Denis MacShane: You should eat up your dinner—clean the plate!

Jane Kennedy: On the other hand, health advice would be to eat only what we need to eat. The hon. Member for Kettering (Mr. Hollobone) presses a very good point. He is right that local authorities need to engage much more with the issue of what we do with organic waste, precisely as my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones) said. There are projects in place, and there is funding, but it needs to be bidded for, and it needs to be based on local circumstances and local need. Good projects should be brought forward; they would then be considered by the regional development agencies, the Department for Environment, Food and Rural Affairs or a local government department.

National Waste Management Strategy

Natascha Engel: What steps his Department is taking to develop a national waste management strategy.

Jane Kennedy: We published the 2007 waste strategy for England on 24 May. Progress remains very much on course, as is shown by continued reductions in levels of household waste—a subject that we have just discussed—and an increase in levels of household recycling.

Natascha Engel: I thank my right hon. Friend for that answer. The emphasis in my question is on the word "national". I think that everybody agrees that recycling, composting and making waste into energy are good things, but on numerous occasions—and twice in very recent history—massive local campaigns have been mounted against a composting plant or gasification unit. The decision has to be taken by the local authority, which will also take the hit for it. Is there some way in which decisions about where such units go could be made nationally, so that we could all take a part in that recycling, composting and gasification?

Jane Kennedy: Some aspects of waste recycling are controversial. Often, the controversy is based on misunderstood information and fears that are not well founded. The Waste and Resources Action Programme offers advice and help, and DEFRA is developing programmes of support for local authorities. The Local Government Association is asking for further detail and guidance on how local campaigns can be clear and reassuring, and can provide good, solid, well-founded information to local communities who might have concerns about a particular technology. There is no doubt that there have been massive improvements in the type of gasification technology that my hon. Friend describes, for example, which causes alarm. People can be reassured that it is good, clean, technology.

Nick Herbert: The Minister told me this week that in all but two English regions, landfill capacity would run out in less than seven years' time. We urgently need a better strategy to increase recycling rates further and develop markets to use waste as a resource for materials and energy in particular. Last month, however, the National Audit Office said that DEFRA had responded too slowly to the landfill directive, with the result that waste infrastructure projects were being delayed. Can the Minister explain why a Department that is meant to be leading on environmental protection takes years to act?

Jane Kennedy: As I said earlier, the recycling rate in England was 7.5 per cent. in 1997 and is now 34.5 per cent. A huge amount of work has been done. We expect the combined impact of our policies in the waste strategy that I described earlier to be a reduction in global greenhouse gas emissions of at least 9.3 million tonnes of carbon dioxide equivalent per year by 2020 as a result of waste management. What would be the impact on targets of that nature of the cuts that the hon. Gentleman would be forced to make in any departmental programme of this kind? When in government one makes decisions that have a big impact, and the decisions that we have made have brought about a sea change in household attitudes to recycling.

David Chaytor: Is it not the case that the heart of a national waste management strategy should be the principle that the polluter pays? Does the Minister share my concern about the fact that more local authorities have not shown interest in differential charging for domestic waste? Is it not common sense that the filthiest households should pay more, and what further steps can the Government take to increase local authorities' understanding of the importance of the "polluter pays" principle?

Jane Kennedy: I do not necessarily agree with my hon. Friend. Some of the poorest households find waste management the most difficult, often because the circumstances in which they live are so difficult. I think that we should work harder to understand how we can help households in such circumstances to do better. One possibility is a punitive approach, but I want to study the situation with some of those local authorities, which may be struggling. We know that it is particularly hard to deal with houses in multiple occupation containing lots of families. I want to understand what the barriers are, and how we can reduce them to help local authorities perform better and improve the environments of some of the poorest people in the country by enabling better recycling techniques to be used.

Common Agricultural Policy (EU Review)

Michael Moore: What progress has been made in the EU review of the common agricultural policy; and if he will make a statement.

Hilary Benn: The CAP health check was, on balance, a step towards our long-term view of the CAP. In particular, it removed about half the remaining production-coupled payments. We will continue to press for further reform for the benefit of farmers, consumers, taxpayers and the environment in the forthcoming European Union budget review.

Michael Moore: The hill farmers in my constituency are in an extremely precarious economic situation. Many are being forced to reduce the size of their flocks and herds, or even to contemplate getting out of farming altogether. Does the Secretary of State recognise that those farmers are vital to the well-being of their local communities and the management of our environment? If so, will he ensure that in the next fundamental review of the CAP we retain enough flexibility for the different parts of the United Kingdom to give long-term support to hill farmers?

Hilary Benn: I agree with everything that the hon. Gentleman has said about the importance of hill farming, and join him in paying tribute to the work that hill farmers do. It is tough farming, undertaken by some of the toughest farmers whom I have met.
	I note the hon. Gentleman's point about future negotiations, but we have already taken one significant step, which we announced not long ago, in replacing the hill farm allowance with the upland entry level scheme. The fact that that has been so widely welcomed reflects both a recognition of the Government's commitment to supporting hill farmers, and our hard work in listening to feedback about what would help them when we were drawing up the scheme.

David Taylor: Does not the CAP cost the taxpayers of the European Union far too much and benefit far too few people? Agriculture represents about 1.5 per cent. of the aggregate EU GDP and about 5 per cent. of people in the EU work in agriculture, but almost half the EU budget is consumed by it. That cannot be allowed to continue for much longer, can it?

Hilary Benn: As my hon. Friend and the House will know, it has been a long-standing aim of the UK Government to reform the CAP in order to address some of the difficulties to which he has drawn attention, and as I said, the health check was, on balance, a further step along the way—although there were some steps forward and also one or two steps back. In the end, the Government's objective is to support farmers for the public goods that the market will not reward them for, which is why we have argued long and hard for a shift of resources from pillar one to pillar two. Agri-environment schemes are extremely important; we celebrated their 21st anniversary last year, but the truth is that this is a long, hard slog, because different EU member states take a different view about the need for reform.

Roger Williams: Farmers are often hampered in producing food by regulation associated with the common agricultural policy. Given that only one animal out of all those tested in England and Wales last year under the fallen stock scheme proved positive for BSE, is it not now time to review the ban of on-farm burial and lighten the burdensome and costly regulation that farmers have to endure?

Hilary Benn: I take the hon. Gentleman's more general point about the cost of regulation, which is why we have been vigorous in, for example, trying to get the best deal we can on electronic identification of sheep. We have made some progress, but as he will be aware, not enough member states are worried about the matter to change the nature of the regulation itself. On his specific point, what is most important is that we act on the basis of the veterinary advice that we have about risk. I undertake to come back to him with a further response to the matter he has raised, but managing the risk and making sure there is no risk to the public has to be the overriding consideration in dealing with BSE.

Denis MacShane: Did not the Secretary of State put his finger on it when he said that reform is opposed by a large number of other countries? There is broad consensus across the House and, I think, the nation on the need for CAP reform in this country, but we have to persuade Dublin and France and Madrid to think differently. To that end, will the Secretary of State bring in some of the Church charities that campaign on opening up trade for the third world, and ask them to talk to the Churches and equivalent charities in Ireland, France, Spain about fighting for a real alteration, because there is no use in our agreeing to this in Britain if we cannot persuade our partners elsewhere in Europe?

Hilary Benn: My right hon. Friend, who has great experience in these matters, of course, is absolutely right: in the end, we have to get agreement across Europe to make the change. The agricultural policies that are pursued in Europe do have an impact on some of the poorest farmers in the developing world. That is relevant to the question of food security, because an urgent task that we face is to support a growth in agricultural production, particularly in the developing world, to feed a rising population, and that is harder for a farmer to do if they do not have a market and cannot see an incentive. I welcome my right hon. Friend's suggestion that we should encourage this debate, looking at all aspects of the importance of agricultural production and at making sure Europe has the right policy, but in the end we have to get consensus.

James Paice: I am pleased to hear the Secretary of State endorse the point about reducing the burden of regulation, and he will know of his own Department's target to reduce the burden by 25 per cent. by next year, but is he aware of the research by Open Europe showing that, far from reducing, the burden is actually increasing dramatically? It estimates that the cost of the regulations that derive from the EU but are interpreted and implemented here is now £1.2 billion, an increase of a massive 47 per cent., and even more seriously, that home-grown regulation—regulation that originates in this country, and largely in his Department—has increased by 275 per cent. since DEFRA was established in 2001. Therefore, rather than waiting for any review of the CAP, when is the Secretary of State going to get a grip on what his own Department is doing and start to lift the burden on our farmers?

Hilary Benn: If the hon. Gentleman would like to draw attention to the specifics of the home-grown regulation to which he is opposed, it would be interesting to hear what he does not want us to do. As he knows, the vast bulk of the regulation comes from Europe and the nitrates directive, for example, was agreed not by a Labour Government but by his party in 1991, so it would have to answer for the form that that took. We worked very hard last year to implement the changes that were required under that legislation in such a way as to minimise the impact on farmers.
	I have already indicated what our position is in relation to electronic identification for sheep. As the hon. Gentleman will know, we have been fighting the pesticides regulation because we do not think that the case has been made, particularly given that there has been no proper impact assessment in Europe. A message that could be sent from both sides of the House to Europe—both in current circumstances, when times are tough, and more generally—is that we should do the things we need to do to deal with problems, but we should not add to farmers' responsibilities if it is not strictly necessary.

Pitt Report

Alistair Burt: When he last met Sir Michael Pitt to discuss the recommendations in his report, "Learning Lessons from the 2007 Floods".

Hilary Benn: I last met Sir Michael Pitt to discuss our response to his report in November. I and DEFRA officials will continue to consult him on progress in implementing his recommendations. The Government will report further every six months, beginning in June this year.

Alistair Burt: When they next meet, will the Secretary of State discuss with Sir Michael the concern, raised repeatedly at public consultations on the Pitt recommendations—particularly by drainage boards such as that in my constituency, which represents the Great Ouse and River Ivel valley areas—that the Environment Agency's policy of minimal dredging as part of its maintenance is continually increasing the risk of flooding, particularly in low-lying, slow-moving watercourses? When is this policy going to be changed?

Hilary Benn: I will gladly raise the issue that the hon. Gentleman has drawn to my attention, of which I am very aware. The Environment Agency spends about £34 million a year on dredging, clearance of debris, polling trees and removal of weeds. The issue is that in some cases, it makes sense to do that to enable the water to pass more quickly to reduce the impact of flooding; but in others, dredging, by the act of speeding up the movement of water, merely makes it arrive faster somewhere else and adds to the problem of flooding. The decision therefore needs to rest on local knowledge about the watercourses and what the consequence of action in one place will be for another place. The Environment Agency takes that responsibility very seriously. The issue is the subject of continuing debate and I have raised it with the agency previously.

David Kidney: DEFRA has a great little scheme that funds some pilots through which farmers and land managers manage their land in ways that hold back flood waters. I have been to see a scheme at Seighford, near Stafford, with Matt Jones from Staffordshire Wildlife Trust, who is the project manager. Some really low-tech solutions are successfully keeping back flood waters at times of pressure. Will my right hon. Friend be talking to Sir Michael about the assessment of those pilots, with a view to seeing whether they could be rolled out more widely? If he does, can he report back to MPs who have pilots in their area?

Hilary Benn: I would be very happy to take up the last of my hon. Friend's suggestions. He makes a very good point, which shows why we are doing the pilots—in order to see what contribution proper management of the flow of water can make to reducing the impact of flooding. As the whole House recognises and as we discussed a moment ago, we need all these means to try to deal with the problem. As I have told the House previously, I am up for considering everything that will be effective in trying to minimise the impact of flooding on communities and people's lives.

Nick Herbert: Sir Michael Pitt has warned that local authorities need legislation to give his recommendations the priority that they deserve. It will soon be a year since the Prime Minister announced a draft floods Bill. As we head towards the second anniversary of the 2007 floods, with more than 1,000 families still in temporary accommodation, why have we not seen even a draft of this Bill? Is it not true that there is now no possibility of this legislation being on the statute book before the election, and that, yet again, DEFRA is living up to its reputation as the Department of delays?

Hilary Benn: I take this opportunity to welcome the hon. Gentleman to his Front-Bench position. I know that he has a very strong personal commitment to the issues that he will now be dealing with as the Opposition spokesperson. I wish him a long and very successful career as the shadow Secretary of State.
	We will be producing the draft floods and water Bill for scrutiny in the not-too-distant future—in the spring. Clearly, it takes time to work out what changes in legislation are required. I reject the hon. Gentleman's accusation that DEFRA is a Department responsible for delay. The figure I gave earlier of the number of flood defence schemes that we have got on with and implemented in the year and a half since the great floods of 2007 shows that this is not a Department that is delaying things, but one that is committed to getting on with things and providing greater protection to people.
	Secondly, it is not as though we have waited for legislation. Although in some respects there is a lack of legal powers to make things happen, we have already indicated to local authorities that the upper tiers will have responsibility for dealing with surface water flooding. We have also got on with funding and, as I announced to the House in December, the first group will start preparing the plans. We are not waiting for the Bill to get on with the work, but if we do need powers to ensure that we can protect people as fully as possible from flooding, that is what the Bill will achieve.

Ian Cawsey: My right hon. Friend will be aware that Sir Michael Pitt's report mentioned the importance of co-ordination between different organisations in terms of flood defence and flood relief. However, although the Environment Agency is looking at new river catchment flood defence plans, I still speak to local authorities, internal drainage boards, landowners and the National Farmers Union who all think that they are not being involved enough in the formulation of those plans. Where several catchment area plans meet, such as in areas of Goole, Snaith and the Isle of Axeholme, not enough thought has been given to the combined effect of the plans. Will my right hon. Friend speak to the agency to ensure more joined-up thinking in that regard?

Hilary Benn: Not only will I do that, but I have already done so. My hon. Friend raises an important point. The Environment Agency has responsibility for drawing up the plans, but this is everybody's problem—including local councillors, MPs, the agency and others. I know that Chris Smith, the chair of the Environment Agency, is seized of the need to improve co-ordination. It works well in some areas, but has some progress to make in others. For communities affected by these problems and given the increased funding, we really want the chance to say, "This is the range of options to deal with the problem." Local communities have to play a part in deciding the priorities, because the choices they make will have consequences. I am determined that we should try to improve co-ordination, but it does mean that everybody must take responsibility for dealing with a problem that faces all of us.

Topical Questions

Tony Lloyd: If he will make a statement on his departmental responsibilities.

Hilary Benn: DEFRA's responsibility is to enable us all to live within our environmental means. At its meeting last week, the United Nations Environment Programme governing council agreed to negotiate new international controls on the use of mercury. That will be an important step forward in protecting human and environmental health and has been widely welcomed by Governments and NGOs. This agreement clearly demonstrates the value of the United Nations.

Tony Lloyd: May I bring Ministers back to matters more domestic, and to the surface water drainage scheme, which is causing enormous consternation not only to church groups, but to flat dwellers who feel that they have been very unfairly treated as their bills have shot up—especially in comparison with commercial properties? Will the Government look at this again and see whether Ofwat has allowed the profiteering water companies to get away with something that they should not have been allowed to get away with?

Huw Irranca-Davies: I thank my hon. Friend for raising what is a very important issue that has been addressed in the House before. He will be aware that the focus has been on the charges imposed by one individual water company, United Utilities. There is a strong regulatory regime, and back in 2003 the Secretary of State made clear his guidance on the need to be proportionate and fair in the introduction of those charges. We have worked with the regulator and the utilities company, and we are pleased to say that some progress has been made—not least United Utilities' commitment to roll back its charges to the 2007-08 regime, which is in effect the pre-surface water drainage charges, and to take the next 12 months to work with the regulator to ensure that the charges next year will be fair and proportionate, as well as recognise the impact on churches, scout groups, sports clubs and others.

Richard Benyon: Recreational sea anglers have virtually no impact on the marine environment. In fact, they can be a great help in terms of our knowledge of fish stocks. Some 1.1 million sea anglers will welcome the EU Commissioner's row-back on plans to include the recreational catch in national quotas. Does the Minister accept that this issue will not go away until the Commissioner defines "recreational sea angler", and will he tell us what efforts he is making to bring closure on this ludicrous proposal?

Huw Irranca-Davies: I thank the hon. Gentleman for that question and, although we have met on other occasions in Committee, I welcome him to his first DEFRA questions as an Opposition spokesman. He is right to say that this is an important issue. The angling fraternity in the UK is huge: it has an important function socially as well as economically, and its members are known for their environmental concerns. We share the concern about the need for an adequate definition of "recreational angling", as the definition applied in other EU member nations is not the same as the one that affects us here. We are actively engaged in work on this with the Commission, and I join the hon. Gentleman in welcoming the comments by Commissioner Jo Borg. We shall continue our work, and I welcome the hon. Gentleman's support in highlighting those concerns.

David Chaytor: Recycled cooking oil is used increasingly commonly in the production of biodiesel, but it can also be used for power generation. Last year, the Court of Appeal made an important ruling about the use of recycled lubricating oil that should set a precedent for the use of cooking oil in the generation of electricity, but the Environment Agency has not yet made its ruling on that. Will the Minister talk to the agency to seek an early ruling about the use of recycled cooking oil?

Mr. Speaker: Order. May I remind the House that we are on topical questions? We need short, sharp questions and short, sharp answers.

Huw Irranca-Davies: I will take your guidance, Mr. Speaker. The Environment Agency has been in touch with the company Living Fuels about the use of cooking oil as a fuel. The process has been thorough and has taken some time, but I am pleased to say that the agency's chief executive has written to the firm's managing director to accept the offer of a meeting to discuss the matter further and take it forward.

Henry Bellingham: Is the Minister aware that proper flood warnings are a vital part of flood protection? In Norfolk, we have a highly effective battery of flood sirens along the coast and the lower reaches of the Ouse. This tried and tested system has worked very well for generations, and does he agree that it would be most short-sighted to replace it with a new system of text messages and radio announcements?

Hilary Benn: I am aware of the issue that the hon. Gentleman has raised. The information that I have is that the sirens are owned by Norfolk county council rather than the Environment Agency, although some people have been under the misapprehension that they were owned by the agency. Their future use and refurbishment are therefore matters for Norfolk county council, and no doubt the hon. Gentleman is raising those matters with that council. However, I am also advised that the police have stated publicly that, in their view, the sirens are no longer required because there are other systems for making sure that people are warned. I think that the hon. Gentleman reinforces once again the need for people who are not already on the Environment Agency's flood warning system to get themselves on it because, frankly, the more ways that people can be advised of a problem, the better.

Lynne Jones: Earlier, I asked my right hon. Friend the Minister of State about incentives to reduce the amount of waste going into the waste scheme, but I am not sure that she addressed that question. Will she look at the perverse incentives in the system that do not encourage waste minimisation and the best quality of recycling? For example, waste glass collected from doorsteps in Birmingham goes to aggregate but, compared to recycling it back into glass, that is not a very environmentally sound way to cope with it. Will she look at how the targets are disincentivising the best kinds of waste minimisation and recycling?

Jane Kennedy: I am aware that there are some rubbings in the system. Clearly, we need to keep the whole panoply of work that we are doing under review. If my hon. Friend checks  Hansard, I think that she will see that I dealt with the incentives that my hon. Friend the Member for Bury, North (Mr. Chaytor) raised, but I will look into the specific case that she raises of how glass is being used.

Anthony Steen: No. 3, Mr. Speaker.

Hon. Members: Just ask the question.

Anthony Steen: This is the first time I have done this. First, I want to thank the Secretary of State for meeting Devon farmers to discuss the effects of bovine TB. They were extremely grateful for the time he gave to them. He also suggested that there would be some vaccine available for the eradication, hopefully, of bovine TB and that Devon would be probably the first area, or at least one area, that he would consider for that trial. Will he tell the House whether the intention is to vaccinate the cattle, in which case, in the supermarket, will the meat of the cattle have marks to show that they have been vaccinated against TB? Or is the plan to chase the badgers all around Devon? Is the Secretary of State going to employ more officials to chase the badgers and inject them with the TB vaccine?

Mr. Speaker: I said short questions.

Hilary Benn: The first vaccine that we hope to have available next year is an injectable vaccine for badgers. As I said when I met his constituents, it would make a lot of sense to have a demonstration project in an area that is particularly badly affected by bovine TB. An oral vaccine for badgers will take some more time, as will an injectable vaccine for cattle. I have put an increasing amount of money into this because we need to explore all the avenues to try to provide help. I was grateful for his constituents' positive response, which showed their willingness to take part in the injectable vaccine demonstration project when we can get it going.

Jim Cunningham: I will be as quick as I can, Mr. Speaker. Will the Minister elaborate on an answer to an earlier question? How will the Department quantify the help that it will give to local authorities to develop green technology?

Mr. Speaker: That is a good supplementary—short and sharp.

Hilary Benn: A number of incentives are already in place in the system, not least for renewable energy, and it is one area in which local authorities can do more. That is why there are incentives under the renewables obligation, why the Government will introduce feed-in tariffs for microgeneration and why the work that my right hon. Friend the Minister of State is doing on anaerobic digestion is important. That all links to a number of the questions that have been asked today. Instead of sticking food waste in landfill where it produces methane, we should generate some energy from it.

John Pugh: I will be brief, but it is a hard question. What is the Minister doing about the tendency of some retailers and waste authorities to stockpile electrical waste simply to sell it at premium and inflated rates to the producers' organisation, the Recycling Electrical Producers' Industry Consortium? That makes the waste electrical and electronic equipment directive more costly and makes producers' responsibilities harder to discharge.

Jane Kennedy: I am aware that there is some concern about certain operations, and, indeed, that has been some recent media interest. I will look into the case that the hon. Gentleman raises.

Michael Jack: Can the Secretary of State explain why his Department has cancelled its 2005 commitment to pay 55 per cent. of the redevelopment costs of the vital Pirbright laboratories? What steps will he take to ensure that the redevelopment of Pirbright takes place?

Hilary Benn: As we have made very clear, we had some concerns about the cost-effectiveness of the redevelopment proposal, not least because the cost of meeting the capital charges of that development would also impact on our ability to fund the world-class research. The Biotechnology and Biological Sciences Research Council is now reviewing how that scheme will be taken forward. In the short term, DEFRA will contribute to the cost of an interim building to help the further redevelopment of the site. As the right hon. Gentleman will be aware, a considerable amount of money has gone into it already, and we need to find a cost-effective solution to ensure that we continue to benefit from the world-class science that is undertaken at the Institute for Animal Health.

SOLICITOR-GENERAL

The Solicitor-General was asked—

Torture (Legal Proceedings)

David Heath: What factors the Attorney-General takes into account in determining where the public interest lies in the context of legal proceedings relating to allegations of torture in interrogation.

Vera Baird: Any decision on whether to bring criminal proceedings for an offence depends first on the sufficiency of evidence and then on whether prosecution is needed in the public interest. The normal principle is that a prosecution will usually take place unless there are public interest factors tending against prosecution that clearly outweigh those in favour.

David Heath: In the current circumstances of the Attorney-General's investigation, it is odd that she is deciding not whether there should be prosecution but whether there should be investigation. In those circumstances, does the Solicitor-General agree that the evidential hurdle should be very low, that if there is credible evidence of torture it should be investigated by the police and that the public interest must always lie in favour of prosecution and factors such as embarrassment to the Government or the interests of foreign powers should never be taken into account?

Vera Baird: I am sure the hon. Gentleman is right that there is no suggestion that that will happen. He did not start where the question suggested I thought he would, which was at the wrong end of it. Indeed, the court approved the Home Secretary sending to the Attorney-General the job of deciding whether there should be an investigation, and that is ongoing. If in due course there is one and there are offences to be considered, almost certainly—unless it is a decision that the House has said the Attorney-General must take—any decision to prosecute will be taken by the independent Director of Public Prosecutions in any event. I hope the hon. Gentleman feels that answer is clear and that it satisfies him.

Andrew Dismore: As my hon. and learned Friend knows, the Joint Committee on Human Rights is looking into these allegations. We are particularly concerned about section 7 of the Intelligence Services Act 1994, which provides for the Secretary of State to waive the liability of intelligence service personnel for legal acts committed abroad in certain circumstances—the so-called James Bond clause. Will my hon. and learned Friend confirm that it would not be in the public interest for any such certification to be provided in any case involving torture, and will she confirm that in the cases being looked at by the Attorney-General no such certificate has been issued?

Vera Baird: I can neither confirm nor deny any such thing. It is not our intention to give a running commentary about the details of the ongoing deliberation process. The Attorney-General has written to the hon. Gentleman, as he knows, and a copy of the letter is in the Library. It indicates the stage that we are at—whether there should be an investigation is ongoing—and the Attorney-General will report to Parliament when she has made a decision.

Douglas Hogg: Does the Solicitor-General agree that the public interest really lies in identifying whether or not torture was used and whether British officials were party to it? The public interest does not necessarily require identifying what information was extracted.

Vera Baird: Once again, I have no doubt that the right hon. and learned Gentleman is right in the factors he puts forward that must play a role in considering the public interest. Let me simply reiterate what the Attorney-General has been asked to do, and the court wishes her to do: it is to see whether there should be an investigation, so please let us not put the cart before the horse. There will obviously be opportunities to look further at the matter. The Attorney-General has made it very clear that she will report to Parliament when she has completed her assessment.

David Howarth: But does the Solicitor-General think that the Attorney-General should have accepted this task in the first place, given the fact that Crown servants, senior officials and even Ministers might be involved? Is this not a situation where the investigation, and indeed the decision to prosecute, must be entirely independent of politicians?

Vera Baird: They obviously will be. I do not know how many times one has to explain that to the Liberal Democrats. The decision whether to prosecute will not be taken by the Attorney-General or by me unless it is one of the offences on which Parliament has said the decision must be taken by the Attorney-General or the Solicitor-General so they cannot avoid it. In all other situations, the decisions will be taken by the independent Crown Prosecution Service and the investigation that precedes any such decision taken obviously by the police.

Jonathan Djanogly: Does the Solicitor-General accept that most people see this as a cover-up of state-sponsored torture by a Government who supposedly introduced the Human Rights Act?

Vera Baird: The hon. Gentleman lashes out like a man trying to get a fly out of his beard— [ Interruption. ] I am sure he is old enough to grow one. As I am sure he appreciates, the Foreign Secretary has made it very clear that the documents that are the cause of concern, which the court worried about and consequently passed on to the Attorney-General, were disclosed to Mr. Mohamed's lawyers only because the British Government negotiated the United States into that position. It is not the British Government who have any reservation about their disclosure. The hon. Gentleman tries really hard to be wide of the mark and he scored a very wide one today.

Careless Driving (Prosecutions)

Peter Bone: How many prosecutions for the offence of causing death by careless or inconsiderate driving have been brought; how many convictions have been obtained; and what the average length of custodial sentences handed down has been to date.

Vera Baird: Causing death by careless or inconsiderate driving under section 20 of the Road Safety Act 2006 came into force on 18 August 2008. Court proceedings data, including prosecutions and so on for 2008, will not be available until autumn 2009.

Peter Bone: I am grateful to the Solicitor-General for the answer. The lorry driver who killed six people on the M6 was convicted of causing death by careless driving and is serving three years. Of course, if that offence had not been introduced, he would have only received penalty points on his licence and a fine. The judge in the case said:
	"This was one of the most serious offences of its kind."
	Is the Solicitor-General therefore surprised that the sentence was three years—nowhere near the maximum of five years?

Vera Baird: The hon. Gentleman is exactly right in his analysis of what would have happened if we had not introduced this offence: it would have been possible only to charge the driver with careless driving, which is summary only and only involves a fine. So by introducing the offence, we have allowed for the right level of culpability to be applied to people who do such things, with appropriate penalties. The case is not one that the Attorney-General can refer as an unduly lenient sentence case, although causing death by dangerous driving, which the jury did not find, would have been such a case. I cannot comment on individual cases, but the hon. Gentleman may get some sense of what we think about it by my making that observation.

Patrick Cormack: While not in any way disagreeing with what my hon. Friend the Member for Wellingborough (Mr. Bone) has said about the case and accepting that the Solicitor-General does not want to expand on it, does she accept that many people who cause death by careless or inconsiderate driving are not of the criminal fraternity and that, although they should be certainly very severely punished, a community sentence, rather than a custodial one, is very often a better way to punish them?

Vera Baird: We leave sentencing to the judges, within the parameters that are set down by Parliament. It is a very serious matter to drive a vehicle carelessly. For instance, in a number of cases recently, people have been texting while driving cars. Such rashness, carelessness and dangerousness does require condign punishment and ought to be met with imprisonment in my view, although I am not a sentencer.

Criminal Justice System (Vulnerable Women)

Kerry McCarthy: What steps she is taking with ministerial colleagues to assist vulnerable women in the criminal justice system.

Vera Baird: In common with other witnesses who are vulnerable or, indeed, intimidated, women in that category are entitled to special measures to help them to give evidence, such as giving it from behind a screen or by video link. In rape and domestic violence cases, which have high women victimisation rates, they can now have the help of an independent domestic violence adviser or independent sexual violence adviser, who will befriend and help the victim through the proceedings.

Kerry McCarthy: I thank the Solicitor-General for that response. I am sure that she will be aware of the recent case where a judge called a halt to a case of robbery on the grounds that the victim was too convincing in her identification evidence. My concern is that, in cases, particularly rape cases, that hinge on the victim's words, that may discourage women from coming forward, because they are damned if they are not convincing enough and they are damned if they are too convincing. What reassurances can my hon. and learned Friend give me that women will not be discouraged by the precedent that has been set?

Vera Baird: As my hon. Friend said, it was not a rape case at all; it was a case, I think, about dishonest offence and identification. I am not very close to the case, but it appears as though the identification involved only a fleeting glimpse, which is a very dangerous thing to allow to go before a jury. If a person believes that they have recognised someone, they are very convinced of it and they sound strong, but the experience of the courts is that a fleeting glimpse can often mislead. I think that the case was withdrawn from the jury in that context, but I could not agree more with my hon. Friend that the turn of phrase used by the judge was most unfortunate and should not be taken seriously by any woman who is thinking of coming to court. The stronger she is in her evidence, by and large, the better, and we want to fortify all witnesses and victims to be able to feel that they can come to court and make complaints when justice requires it.

Martin Linton: In view of recent cases referred to the Court of Appeal for leniency, will my hon. and learned Friend consider reviewing the sentencing guidelines for rape?

Vera Baird: The sentencing guidelines are kept under review primarily by the Sentencing Advisory Panel, which has strong links with public consultation, and then by the Sentencing Guidelines Council; between their reviews, the Court of Appeal keeps its eyes on such sentences. There have been a number of referrals because of undue leniency. When it has seen fit, the Court of Appeal has put those cases right and thereby sent out strong messages to future sentencing judges, with which for the time being we are very content.

Disabled People (Court Proceedings)

David Taylor: What recent discussions she has had with the Secretary of State for Justice on steps to assist disabled people taking part in court proceedings.

Vera Baird: I have not had any recent discussion on that specific topic with the Secretary of State for Justice himself, but through the Crown Prosecution Service we have been working closely with our other criminal justice partners to improve support for disabled victims and witnesses. The CPS is carrying out a consultation on a new policy for prosecuting cases involving witnesses or victims who have learning disabilities or mental health issues.

David Taylor: People with mental ill health are probably the single largest disabled group in the context of this question. Will the Solicitor-General have discussions with the Secretary of State for Justice, particularly in relation to the answer that I was given when I raised my concerns about those involved with mental health tribunals? I feel that they are not getting a fair crack of the whip. If the Solicitor-General reviewed the scale of the problem and suggested proposals through which we could tackle those difficulties, I would be most grateful.

Vera Baird: My hon. Friend makes a strong point. He is a well-known supporter of disabled rights, and I compliment him on the perseverance with which he pursues those interests. I can answer only for the prosecution authorities; the mental health tribunals do not fit into my responsibility. I suggest that my hon. Friend raises the issue with the Secretary of State for Justice, from whom I am sure he will get a sympathetic response.

Alan Beith: Is the Solicitor-General aware that part of the concern is that prosecutors are too often unwilling to regard people with mental health problems as potentially credible witnesses? Does she have any ideas about how that attitude can be changed?

Vera Baird: The right hon. Gentleman has put his finger on what has been a historic problem; it surfaced recently in a case, for which the CPS apologised straight away. The CPS has invited Mari Taber, a director of Mind, to carry out an internal review of that case with a view to learning lessons more broadly. The consultation to which I have already referred is about putting forward a strong policy about how decisions concerning those with learning difficulties or mental health problems should be made in a sensible way so that those people are empowered, not disempowered.

Fraud Act

Andrew MacKay: How many prosecutions have been brought under the Fraud Act 2006.

Vera Baird: I answer only for the prosecutors whom the Law Officers superintend—not for the Department for Work and Pensions or the Department for Business, Enterprise and Regulatory Reform, for instance.
	The number of offences under the 2006 Act are as follows: there were 9,221 in 2007 and 22,687 in 2008. This year, until 20 February, there have been 4,148. Small and very large frauds are included; it is difficult to make much of the figures.

Andrew MacKay: We supported the 2006 Act because the Government suggested that the consolidation of fraud legislation would dramatically increase prosecutions for fraud. Is the Solicitor-General satisfied that that is happening and that the Act is being used properly, correctly and to successful effect by our prosecutors?

Vera Baird: On the face of those figures, it appears that the Act is being used substantially—there was a great increase between 2007, when it was very new, and 2008, by which time everybody had had full training about it and appreciated its simplicity and utility. On the face of it, it looks as if the Act is being used extensively. As I said, it is hard to make very much of such bald figures.

Banking (Asset Protection Scheme)

Alistair Darling: With your permission, Mr. Speaker, I shall make a statement on the bank asset protection scheme and today's agreement with the RBS Group. I hope that the House will understand, again, that it was necessary for the Treasury and RBS to issue market notices this morning, in the usual way.
	In my statement to the House last month, I set out the principles behind the Government's proposals to put the banks on a stronger footing, insure their balance sheets, and boost bank lending. I can now tell the House that those measures are being implemented: at the end of January, the Bank of England's temporary special liquidity scheme was replaced with a permanent facility; last week, the Bank of England began purchasing assets to free up markets for commercial lending; and on Monday, Northern Rock announced that it would provide up to £14 billion of new mortgage lending.
	Banks are at the core of all modern economies—they allow people and companies to make payments, and to save and invest for the future. Indeed, if we and other countries do not fix the banking system, we will not fix the rest of the economy. The basic problem that we are facing is a crisis of confidence about bank assets, which is preventing the UK banking system from providing loans for businesses, and mortgages for those who want to buy a home. The critical barrier to improving confidence and expanding lending is the uncertainty about the value of banks' balance sheets. We must now enable banks to clean up their balance sheets so that they can become stronger and rebuild for the future, making them more able to lend to people and business all over the country. That will not happen overnight, but it is the essential starting point; it must go hand in hand with a broader reform of supervision and regulation of the banking sector; and that action must be taken not only here but by Governments right across the world, because the alternative is a failure of the banking system, here and elsewhere, which will make the recession longer and more painful, putting more jobs at risk.
	The challenge today is to provide certainty against a background of a sharply deteriorating global economy. The IMF, which in October was forecasting world growth this year of 3 per cent., is now forecasting growth this year of close to zero. In the last quarter of last year, the world economy shrank for the first time since 1945, with Japan, America, Germany and Europe, as well as the UK, all now in recession. All that followed from the sudden collapse in confidence when Lehman Brothers—the world's fourth biggest investment bank—went bankrupt in the autumn. That has meant even weaker banks, which are lending less, and in turn leading to further economic weakness. So getting the banks to lend again is essential to our economic recovery and to our fight against the global economic—financial—recession.
	In October, we injected additional capital into the banking system to prevent the collapse of banks and to maintain their ability to lend to companies and home buyers. We had to act quickly—in a matter of hours, not months. We made available then up to £50 billion initially, of which £37 billion was taken up. I have always said that we stand ready to do whatever it takes to maintain financial stability. So, as well as additional contingent capital, today I am making a further allocation of £13 billion for RBS in return for non-voting shares. These shares will be purchased at a similar price to those purchased in October, and they in turn will pay a preference coupon.
	The Government are currently set to own up to 70 per cent. of RBS, for which the taxpayer will benefit when the bank recovers and strengthens in value. We believe it is important that there remains some private ownership in RBS—by pension funds and individual investors, for example. We have therefore decided that in injecting this capital, we will do so by purchasing non-voting shares, in line with practice in other countries. That means that the Government could now own up to 84 per cent. of RBS in economic terms, but the institution will remain as a privately quoted company. That will provide potential gains in the long term for the taxpayer and an easier return to full commercial ownership when the shares are sold and the proceeds come back to the taxpayer.
	In January, we announced the creation of a scheme to identify losses and clean up the banks' balance sheets, giving them the confidence to lend again. A range of different mechanisms have been suggested to do that, but in the end they all require the same basic approach: first, a thorough analysis of the banks' balance sheets to establish what their assets and loans are worth and whether they are likely to be fully repaid; and secondly, a comprehensive stress test of whether the banks are strong enough to survive bad economic scenarios and establish what further losses the banks can bear, to satisfy us that the banks have enough capital to get through the recession and to keep lending going. Thirdly, it enables the Government to judge the necessary scale of their intervention, either by buying up the assets or insuring them, in return for a fee or a share of future gains.
	That is the approach that we will follow in the asset protection scheme that I announced in January. In arriving at the design of the scheme, we have taken account of the experience of other countries which in recent months have announced similar action: including the Swiss, with UBS; the Dutch, with ING; and the United States, with Citigroup and Bank of America. The scheme is open to all eligible banks and building societies, and I expect a number of them to apply to use it according to this approach. Lloyds Banking Group has today confirmed that it is in discussions with the Treasury regarding participation in the scheme.
	In relation to RBS, which has announced its results today, let me set out how the asset protection scheme will be applied. When the Government purchased their stake in December, a new management team was put in place, and it has been going through the books, identifying potential losses. As the House will understand, that cannot be done quickly, because the assets are both complex and numerous. As we have seen only recently in the case of the United States, the valuation of these balance sheets takes considerable time, and all the more so if it is done against a background of sharply deteriorating global conditions.
	Today, the chief executive of RBS announced a plan to restructure and rebuild the bank, including an agreement to extend its lending in the UK. To complement that, RBS will include £325 billion-worth of assets in the asset protection scheme. That will include a range of assets in the UK and abroad, most of them including mortgages and business loans that are currently hard to value. The Treasury, with the help of external advisers, has assessed the assets held by RBS and subjected its balance sheet to a series of different stress tests overseen by the Financial Services Authority and the Bank of England—a practice that the United States Government yesterday announced they will apply to institutions seeking support.
	To protect the taxpayer, RBS will have to bear the first portion of any additional losses over the coming years, up to a total loss of 6 per cent., or some £20 billion, on top of the £22 billion of impairment and write-downs that it has already taken. As in any insurance scheme, RBS will have to bear the first losses. After that, the Government will cover up to 90 per cent. of any further losses. RBS will also pay a fee of 2 per cent. of the value of the assets insured—some £6.5 billion—again, as in any insurance scheme. It has also agreed for a number of years not to claim certain UK tax losses and allowances, meaning that when it does return to profitability it will not be able to benefit from the losses accrued in the intervening period.
	In return for this, RBS has agreed to maintain and increase its lending for mortgages and businesses in 2009 by an additional £25 billion, with a further £25 billion in 2010 depending on market conditions. That is at the heart of the deal that we are striking with RBS. That new lending will be on top of maintaining lending on mortgages and other loans of just under £300 billion in the UK. These lending commitments with be legally enforceable and externally audited, and the Treasury will report annually on RBS's delivery of its lending agreement. RBS has agreed to continue treating its customers fairly, including by participating in the Government's home owner mortgage support scheme. That will go hand in hand with the tough conditions on RBS bonuses that we announced last week.
	Together, these measures will help restructure and rebuild RBS, making one of the UK's biggest banks also a stronger bank, better able to serve the people and businesses of this country, returning to tried and tested principles of banking. Other participating banks that join the scheme will have to agree to make more lending available, and banks will also have to review their policies on pay and bonuses to come up with long-term strategies that prevent excessive risk taking and reward successes, in line with the FSA's new code of remuneration practice.
	As with previous measures, the capital support for the banks is an investment that will eventually be sold to the benefit of taxpayers. With the insurance scheme, the eventual cost to the taxpayer over the lifetime of the scheme will depend on economic conditions and how the assets are managed. That means taking that risk on to the taxpayer for a fee, but in a way that ensures that the banks remain able to lend. That strategy for tackling the bad assets has worked elsewhere in the past. So while the taxpayer does face risks as a result, the cost of doing nothing is far greater. In the long term, the taxpayer will benefit from returning our stake in these banks to full commercial operation because, as I have said before, I am clear that British banks are best owned and managed commercially, and not by the Government.
	The future of the UK as a financial centre, and the future of our economy and thousands of jobs, depend on being able to run banks commercially. All countries are having to deal with the same problem: how to isolate assets that are damaging confidence in the banking sector and preventing banks from lending more. Over the coming weeks, we will continue to discuss with other countries, including the new US Administration and with the European Union, how best to co-ordinate our approach to the common challenges we face. As part of our presidency of the G20, I have written to Finance Ministers setting out a set of principles for dealing with asset protection and insurance.
	It is essential to restore confidence in the banks to allow them to clean up and rebuild, and get lending going again. The economic recovery, and thousands of jobs, depend on it, and I commend this statement to the House.

George Osborne: I thank the Chancellor for his statement, but to be blunt, we have heard all these claims before. Back in October, just like today, he told us that a huge taxpayer bail-out of the banks would "get lending started again". He stood there waving a piece of paper, just as he has again today, and claimed that he had binding legal agreements with RBS, yet of course business lending has fallen by £5 billion since October and, as the inflation report shows, continues to fall.
	Back in October, just like today, the Chancellor said that his first bail-out was a good deal for the taxpayer. Indeed, the Prime Minister claimed that we would soon be making money on the shares that we had bought. But now we all know that the taxpayer has lost £16 billion to date on the deal that was done in October. Back in October, just like today, the Chancellor said that a key condition of the bail-out would be an end to excessive bonuses and rewards for failure, yet today we discover that the chief executive who helped to bring RBS to its knees is getting a £650,000 a year pension for life, negotiated with the Government. While a second bail-out seems inevitable, we will therefore treat the Chancellor's claims about his latest plans with a healthy degree of scepticism.
	Let me ask the Chancellor these specific questions. First, on lending, he says that RBS has committed to lend £25 billion a year. Will he confirm that that represents just 3.4 per cent. of total RBS lending to non-bank customers? He said once again, as he often has, that he has a legally binding agreement, but the new chief executive of RBS said on the radio this morning that that agreement is subject to its continuing to price on arm's length terms. Given that that price is currently prohibitive to many businesses large and small, why does he expect this legally binding agreement to be any more binding than the last one? Indeed, he says that the lending agreement is legally enforceable. How exactly is he going to enforce it? Will he give RBS the money to pay the fine when he enforces the agreement?
	My second set of questions ask the Chancellor to be absolutely straight with people about how much the taxpayer could lose. Of course, this is a sweet deal for the banks, their management, the remaining shareholders and above all their creditors. The first loss to be borne by the bank is just 6 per cent. That is much lower than the 10 per cent. that the Treasury was initially briefing and the 10 per cent. that the Dutch authorities have imposed on ING. The fee is just 2 per cent.—half the level that the Treasury set out to try to negotiate—and it is being paid only in non-voting shares. Will the Chancellor confirm that that is because otherwise, according to stock exchange rules, RBS would stop being listed altogether? What is more, we are giving the bank billions of pounds to pay the fee to ourselves. That is like saying, "Lend me a tenner and I'll buy you a pint."
	Will the Chancellor now say exactly what the potential exposure of the taxpayer is under this deal? He did not answer that question on the radio, so will he answer it today? Will he now impose the full independent, asset by asset audit of the British banks that the Governor of the Bank of England has just called for in the Treasury Committee and that I called for at the Dispatch Box last month?
	Finally, on excessive bonuses and rewards for failure, once again the Chancellor has promised there will be none. Yet this morning he said in his radio interview that he learned only a very short time ago that Sir Fred Goodwin was paid off with a £650,000 a year pension funded by the taxpayer. However, the new chief executive, who was on the same radio programme, said that the deal was negotiated with the Government. Who exactly in the Government knew about that deal? Will the Chancellor answer the claims that Fred Goodwin's departure was delayed so that he could secure that pension? Whichever way one looks at it, that obscene pension is unacceptable and the Government are on the hook. Either they did know and failed to act or they did not know and failed to ask the right questions. It is a totally irresponsible use of taxpayers' money. There is, of course, now only one person who can correct that huge error of judgment by the Chancellor, and that is Fred Goodwin himself, who should in all decency renounce his pension.
	The Government have no option but to undertake a second enormous taxpayer bail-out of the banks, because the first enormous taxpayer bail-out has failed. Let us hear no more nonsense about what a good deal has been struck. The British taxpayer is insuring the car after it has crashed. The sad truth is that families throughout the country pay the price, while those responsible try to walk away from the wreck—so far, unscathed.
	The Prime Minister who presided over the fiasco is off trotting on the world stage while the man he knighted, Fred Goodwin, is walking off with a £650,000 a year pension. That is why the Government have lost the confidence of the British people in their ability to deal with the recession that they helped create and the banking crisis that they failed to prevent.  [Interruption.]

Mr. Speaker: Order.

George Osborne: The Chief Secretary should just concentrate on her leadership campaign and stop barracking the Opposition.
	The Government have announced so many different schemes, executed so many about-turns, made so many false claims and broken so many promises that no one believes a word they say any more. They are running around like headless chickens, trying to save their own necks. Once again, the British taxpayer will pay a huge bill for the mistakes of Labour's age of irresponsibility.

Alistair Darling: First, once again, it is clear that, although the hon. Gentleman could not quite bring himself to say it, he agrees with what we are doing. Although he now tries to criticise what we did last October, at the time he expressed full agreement with it, because he recognised that our banks, along with those in other parts of the world, faced collapse, and that we had to step in to recapitalise them. We had to do it quickly—in a very short time. We did not have the luxury of months to go through the books and make decisions about what might happen further down the track; we had to take action quickly. At that time, the Opposition supported our actions, although they subsequently found it convenient to change their mind and walk away from that support.
	On the agreement that we reached in October, we said that the banks in which we took major shareholdings—RBS and Lloyds TSB—would undertake to maintain the same level of lending as in the previous year. They have been able to do that, but against a background of a marked reduction of lending in this country, especially from foreign banks, which have either withdrawn to their own countries, or in the case of the Icelandic banks, for example, have got into such great difficulties that they cannot lend. In the last quarter of last year, there has also been a sharply deteriorating position in the economy.
	We want—it is important—to get lending going again because, as I said earlier, if we do not fix the banking system, it will be difficult to fix the wider economy. It is a problem that we face, the Americans face, the Germans face, the Japanese face—it is a problem right across the world. That is why I said in January that we would have to do something about the problem of assets on bank balance sheets that people either could not value or had deteriorated in value because of what is happening in the economy. As a result of what we have been able to do, RBS will increase its lending by £25 billion this year and next year, on top of the £300 billion that it currently lends in this country.
	I believe that the insurance rates are appropriate. It is also right to put in the additional capital to help the bank get through the recession. Nobody wants to be in that position—no Government wants to be in that position—but, throughout the world, we must all face up to the fact that banks need additional capital and that we need to ensure that they have a proper insurance scheme to enable them to continue lending.
	The hon. Gentleman asked about audit. I said in my statement that there needs to be a thorough audit of banks that come into the scheme. I am aware of what the Governor of the Bank of England said this morning—I have heard him say it on previous occasions. I agree that, especially when insurance is involved, there needs to be a rigorous audit, not only so that banks understand the position, but so that we do, too.
	The hon. Gentleman mentioned the remuneration of Fred Goodwin. It is beyond doubt that most people find it hard to understand, given what has happened to RBS, that such an enormous pension can be paid from the age of 50. Let me explain the position. First, the agreement was not negotiated by the Government; nor was it approved by the Government. Nor would it have been— [Interruption.]

Mr. Speaker: Order. Let the Chancellor of the Exchequer answer.

Alistair Darling: The agreement on remuneration—the pension arrangements—of employees of a bank is a matter between the employee and the board of directors. Last autumn, we were told that there was a contractual agreement between the bank's board and Sir Fred. We previously understood that his pension arrangements were an unavoidable commitment, but we did not know—we became aware of it only very recently—that the decision of the previous board of RBS to allow Sir Fred to take early retirement had the effect of increasing his pension entitlement, and that that might have been a discretionary choice. We did not know that and, on finding out—[Hon. Members: "When?"] Last week, actually. It became clear that the matter may have been a discretionary choice. When we found out, I asked United Kingdom Financial Investments, which holds the shares, to discuss with the new board of the bank whether there was any scope for clawing back some or all the pension entitlement, and whether the board made the decision in full knowledge of the facts. That investigation is going on at the moment. As I said, and I agree with the hon. Gentleman, the matter could be concluded swiftly, because Sir Fred Goodwin could decide not to take the pension—that has been put to him—but the ball remains in his court.
	I believe that the measures that we have taken on RBS and the asset protection scheme are necessary and unavoidable. It is an essential part of what we must do and what other countries must do if we are not only to fix the banking system but, more importantly, to ensure that we can rebuild our economy and help people and businesses in this country.

Vincent Cable: In October, we broadly supported the Government because we thought that that was the right patriotic response in an emergency and because their proposals for bank recapitalisation were sensible. However, I am afraid that they have now almost completely lost the plot. The proposal for asset protection is a disgrace and a betrayal of the taxpayer's interests. It is a classic case of privatising profits and socialising loss.
	We know from American experience that valuing bad assets is hideously difficult. We also know that the banks know more about their bad assets than the Government, so there is now an open invitation to the banks to dump their worst assets on the Treasury, for a fixed fee, knowing that the taxpayer will pick up 90 per cent. of the losses. That is a fraud at the taxpayer's expense.
	There is a much better approach—the way in which the Government started dealing with the problem. It is to acquire shares in the banks—ordinary shares with full voting rights. That guarantees that any upside in recovery—if there is one—and any eventual sale fully accrues to the taxpayer. It also gives the Government full effective control over banks' lending strategy and remuneration, instead of the current feeble agreements, which the banks have treated with contempt.
	We know what the Government are afraid of: being accused of nationalisation. Let me quote what the Government's old friend—the Prime Minister's hero—Mr. Alan Greenspan said about that only last week. That American Republican free-market ideologue stated:
	"It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring"
	to
	"allow the Government to transfer toxic assets to a bad bank without the problem of how to price them"—
	the problem we have today.
	"You",
	he said to the Government,
	"should not get caught up on a word"—
	that is, nationalisation. He continued:
	"It doesn't matter what you call it, but we can't keep on funding these zombie banks without gaining public control."
	The problem is that we have not only zombie banks, but a zombie Government: the walking dead, controlled by people who have a strong vested interest in protecting their bonus arrangements and covering up large-scale tax avoidance scams.
	The Government claim credit for being tough and stamping on the generous bonus arrangements of RBS and NatWest. I totally agree with the Conservative shadow spokesman about Sir Fred Goodwin.
	He was absolutely right. He could also have asked—I will ask—how much in addition the Government have given in tax relief to Sir Fred Goodwin and people in his position.
	However, there is a wider point about bonuses: they are public expenditure. These bonuses are a massive spending increase on public wages for which there is no justification whatever. What response will the Chancellor give this morning to Barclays, which has said that it will not deal with the Government unless all its bonus arrangements are fully protected? That is blackmail and he should make it absolutely clear that he will stand up to it.
	I have one final question about what the Prime Minister said in the paper on Sunday about the proposal, which a growing number of people on all sides accept, that in the long term the low-risk high street lending activities of the banks have to be separated from the high-risk casino-type activities with which they have been associated. The Prime Minister seems to have capitulated to pressure to abandon that proposal altogether. I can understand why the banks want to hang on to the operations that generate their bonuses, but why on earth should the Government be giving a long-term guarantee for gambling activities on a global scale? It is incomprehensible and completely without justification.
	I feel rather sad about this response, because I normally try to be constructive, but the Government's proposal is absolutely dire.

Alistair Darling: On the last point that the hon. Gentleman made, there has been a lot of debate about whether banks should be separated, so that they organise themselves along the lines of what that they had in America for many years, with what he calls low-risk retail banks and, on the other hand, investment banks. I would just remind him that the first bank that got into trouble in this country was not an investment bank but Northern Rock, which is a retail bank. The problems have been experienced both by banks with complex models, and by investment banks pure and simple—indeed, many have now collapsed—and retail banks. The regulatory system should distinguish between the two. Perhaps on another occasion there will be an opportunity to discuss what we need to do on supervision and regulation.
	In relation to the hon. Gentleman's broader point, about nationalisation—the one on which he takes fundamental issue with the Government—I just disagree with him. We have, as it happens, nationalised a bank already: Northern Rock. However, I have always made it clear that our long-term objective is to get that bank and the banks in which we have shareholdings operating back into the private sector. That is something with which the Liberal party and he agree. I therefore do not believe that it is in our interests to completely squeeze out the remaining part of the private shareholdings in RBS, which is what nationalisation would entail. Also, as we have 70 per cent. of the votes there, it is beyond doubt that we control the bank. It is not as though it could block a decision that we really insisted upon.
	It is important to strike the right balance. Even in these times, we need to look at the long-term destination of those banks. It is right that we should strike that balance, as I said earlier this morning. I just think that the hon. Gentleman is plain wrong in what he said about that.

Dennis Skinner: Is the Chancellor aware that we all recognise that the reason why today's measure has been announced, as well as the previous one, is to ensure the bank deposits of the vast majority of people in Britain? However, it is becoming increasingly apparent with every statement that those in the banking fraternity have, by and large, been on a winner for a long time. They are no different, really, from Nick Leeson, and that fellow Madoff in America who made off with the money. I have a novel suggestion for the enemy within. Instead of paying out vast executive bonuses and Freddie Goodwin's massive £650,000 pension, why not tell them that those of us on the Labour Benches will gladly walk through the Lobby to ensure that all those executive bonuses and that pension fund for Freddie Goodwin and his mate will be paid for out of the toxic debt when it has been repaid, which will be never? That is the proposal that we ought to put to those bankers and we should treat them with the contempt that they deserve.

Alistair Darling: I agree with my hon. Friend that it is essential that we change the culture that has been prevalent in so many financial institutions and that bonuses be tied to the long-term performance of a company and paid for some special effort or as part of a reward for working hard to ensure the long-term health of the bank. I also agree with him that the reason for the action that we have taken is to protect depositors and ensure that we do everything that we can do to get lending going again in this country.

Michael Fallon: Will the Chancellor confirm that the full details of Sir Fred Goodwin's pension were set out in RBS's 2007 annual report? If he is really telling the House that he spent £20 billion of our money four months ago and has only just checked out the details of the chief executive's entitlements, he is even more hopeless and hapless than we thought he was.

Alistair Darling: As the hon. Gentleman knows, that is not what I said.

Liz Blackman: Bank lending in Erewash is, as it is everywhere else, pretty variable and constrained by the current climate of uncertainty. The freeing up to lend initiative that was announced this morning has the prospect of helping some of the businesses and the families in my constituency, but can my right hon. Friend give some more detail about how it will be monitored locally, so that RBS does what we are asking it to do?

Alistair Darling: As I have said, we will be publishing an annual report. Into how much detail and how local it can go remains to be seen but, in addition, it is important that we regularly monitor lending to ensure that it starts flowing through to individuals and businesses.

Graham Brady: Can the Chancellor tell the House what assumptions about the state of the economy and the performance of the assets at RBS were used in arriving at the level of the fee, or did he just pluck it out of the air?

Alistair Darling: No, the fee was calculated taking into account RBS's position and the assets that were put forward. We will approach the other banks in exactly the same way.

James Plaskitt: I welcome my right hon. Friend's statement. It is clear that large public holdings in the banks are beginning to drive major and essential structural change. However, as banking is a global business, does he agree that the restructuring that is starting to take place and the redrafting of the regulatory system need to be globally co-ordinated and if so, how will we help to achieve that?

Alistair Darling: I agree with my hon. Friend on that. We need to do what is necessary in both restructuring and financing, but we also need to ensure that the regulatory and supervisory framework is effective. However, that only gets us so far, because most banks trade across borders throughout world. It is also necessary to ensure the same approach in different countries, which is why I said in my statement that we need to work with the Americans and in Europe. That will be very much part of the focus of the meeting of the G20 Finance Ministers in a couple of weeks here in London.

Desmond Swayne: If the amount that the Chancellor has said that RBS must lose before his guarantee kicks in is correct, then, if I were still doing the job that I was doing 12 years ago in group risk management in RBS—[Hon. Members: "Ah!"] It would not have happened on my watch. On the basis of traditional banking practices, I would be urging the bank to build up reserves rather than engage in additional lending. Why would I be wrong?

Alistair Darling: First, I will happily pass on the hon. Gentleman's name to the new chief executive of the bank and see whether he can re-employ him. Secondly, and rather more seriously— [ Interruption. ] I am glad that the right hon. Member for West Derbyshire (Mr. McLoughlin) is thinking of the health of RBS. In relation to the hon. Gentleman's general point, the Government have to intervene and make it possible for there to be more lending precisely because, if left to their own devices, banks stop lending to individuals and businesses, and that would simply make the present difficult situation far more difficult. That is why my argument is that doing nothing not only does not work, but is damaging to our future prospects.

Lynne Jones: I share concerns about socialising losses and privatising gains, but whatever means are used to back the banks and private financial institutions with public money, I think everybody is agreed that it is necessary. Given that situation, my question is: why are the Government still relying on commercial loans to secure investment in public-sector infrastructure projects and public services such as the Royal Mail? Should we not cut out the middle man?

Alistair Darling: On PFI projects, I hope that we will shortly be able to publish proposals that will take account of the difficulties about funding that my hon. Friend referred to. On her more general point, I believe that a combination of the public and private sectors working together, whether it be for the provision of finance or elsewhere, is a good thing. That applies to the Royal Mail, too, as it needs more money to help it modernise and improve. That is why I think that bringing in private capital to work alongside the public sector is a good thing.

Andrew Robathan: I guess that the banking crisis and the recession are the most important issues facing the country and Parliament today. I do not know whether the Chancellor noticed while he was making his statement that there were only about a dozen Government Back Benchers behind him and three times that number on these Opposition Benches for a party half the size. To what does he ascribe that? Does he think that it is because Government supporters are not interested or are idle, or does he think that Government Back Benchers have, like the rest of the country, lost confidence in him and his Government?

Alistair Darling: The hon. Gentleman is right to say that the banking problem is the most important that we face at the moment, so I am surprised that he did not want to ask a question about it.

Sally Keeble: I welcome my right hon. Friend's statement. In addition to the commercial and residential property loans that are among the eligible assets for the scheme, the Treasury statement of this morning also mentioned structured credit assets, which are the ones that have proved very difficult for the banks. Who exactly in the Treasury or among the Chancellor's advisers will be doing the due diligence on this and roughly what proportion of those assets does he expect to make up the scheme?

Alistair Darling: The diligence examination of the assets was carried out by the same people in respect of all the assets. It was not done by the Treasury alone, as we brought in outside advisers so that we could be satisfied as to what was being offered for insurance and then take a view on what price would be appropriate.

Stewart Hosie: I agree with the Chancellor that fear of the toxic assets was the main inhibitor to securing confidence in lending and I give a cautious welcome to the asset protection scheme. As to RBS, however, it will fund its insurance by taking the first losses, 10 per cent. of subsequent losses, a 2 per cent. fee and, most significantly, deferred tax assets. If any other eligible banks wish to take part in this, will they be subject to the same payment terms, the same deferred tax assets and the same attachment point, and will it be done on a bank-by-bank basis?

Alistair Darling: The answer is that we will look at each bank on its merits. We do so because what is offered for insurance will vary from bank to bank and we will have to make an assessment of the position of the individual bank. In the meantime, I welcome the hon. Gentleman's general support for our proposals and his agreement that this is the right thing to do.

Andrew MacKinlay: Does the Chancellor understand that many ordinary people are bewildered and dismayed that, across the Atlantic, there are obligations to fiduciary duties, compliance and due diligence, which are backed up by the sanction of the criminal law, yet there is an absence here of such obligations. Unless or until financial institutions, managers and directors know that they could face the law, we will continue to see this recklessness and selfishness enduring. Will my right hon. Friend tell the House that Lloyds TSB and the RBS group are fully co-operating with the United States Justice Department in respect of the documents that were doctored in London in order to get round US sanctions on money for Iran, as the conduits were the RBS group, Amro and Lloyds TSB?

Alistair Darling: I hope that any institution in this country would co-operate with the relevant authorities, whether it be in the United States or anywhere else. On my hon. Friend's more general point, it is important that people obey the law, irrespective of their area of work, and that has to be enforced by authorities that are independent of the Government.

Nicholas Winterton: I am deeply concerned about the hundreds of thousands and perhaps millions of people in this country and abroad who have lost or are losing their jobs. We have to get the banks lending again to ensure that our economy can grow so that unemployment will not be as high as we perhaps fear. Does the Chancellor believe that the money put aside for Sir Fred Goodwin to enable him at the age of 50 to have an annual pension of £650,000 will give people the confidence—it is confidence that is lacking in this country and elsewhere at the moment—that we can come out of the recession? Will he give an assurance that that pension will be stopped because it is being funded by taxpayers' money?

Alistair Darling: I said earlier that the board and UKFI on behalf of the Government are pursuing that matter. On the hon. Gentleman's first point, like him, I have the greatest concern for people at risk of losing their jobs; that is why we have put in place measures to help people back to work. For many years I listened to the hon. Gentleman when he sat on the Government side, so I know that he was consistent—unlike some of those sitting around him—throughout the '80s and '90s in expressing his concern. I share it and I welcome his support for the measures that we are taking to help people back to work.

Andrew MacKay: Staying with Sir Fred's grotesque pension, why does the Chancellor think that the new chief executive of RBS stated clearly on the "Today" programme this morning that his predecessor's leaving arrangements were fixed between the old board and the Government? Was he deliberately misleading listeners or was he pointing out that the Chancellor was responsible for this grotesque pension and knew about it more than a week ago?

Alistair Darling: As I said, the pension arrangements were agreed between the previous board and Sir Fred Goodwin. That remains the position.

Michael Jack: The long-term effectiveness of the Chancellor's measures is predicated on growth resuming in the British economy, but his statement referred to the International Monetary Fund's dire assessment of when growth is likely to return. Will the Chancellor confirm whether he still stands by his pre-Budget report, which said that growth would resume in the British economy in three months' time?

Alistair Darling: I said at the time of the pre-Budget report that we would set out our next set of forecasts at the time of the Budget. We will do that. The IMF figure that I mentioned related to its forecasts for the world economy. Since October, when I published my forecasts—they were broadly in line with those prevailing at that time—there has of course been a very sharp downturn in economies here and across the world. The latest IMF world forecast reflects that.

Philip Dunne: We have just heard announced today, so far as I am aware, the largest commitment by any Government of this country at any time in history to an individual entity. The material provided with this information, as so often with this Government, is woefully short of detail. Will the Chancellor confirm two individual aspects of the statement? First, what level of certainty has he reached with the Royal Bank of Scotland that its assets—the £325 billion-worth of assets that will go into this scheme—have been agreed with the Government? RBS has just concluded a conference call with investors, confirming that in its perspective the total quantum of assets of individual assets included in the scheme has not yet been finalised with the Government. Secondly, will he confirm whether any of those assets include non-performing assets? When will he provide detail on the level of the non-performing assets that the Government are prepared to take into this scheme?

Alistair Darling: I can perhaps help the hon. Gentleman on that: I hope very shortly to make further details available, and I will place them in the Libraries of both Houses. Inevitably, it will take time to finalise the detail and to hold some of the discussions that have to take place before an absolute, final agreement is reached, but I think that I was right to come to the House to indicate the general scheme that we are proposing, and the amounts involved.

Peter Bone: Will RBS be able to throw back the losses that it announced today and reclaim previously paid corporation tax, which would result in billions of additional pounds of taxpayers' money being invested in RBS?

Alistair Darling: I set out the tax arrangements in my statement.

Julian Brazier: Having announced this dismal package—a one-way bet that rewards failure on the part of individuals—will the Chancellor accept that this is the sort of pusillanimous leadership, shown in many countries in the 1930s, that led to the rise of extremism?

Alistair Darling: Even by the hon. Gentleman's standards, that is a particularly silly remark. We are taking this action because it is necessary to do so. Indeed, even his own party's Front Benchers have grudgingly admitted that. It simply is not possible to walk away from the problem—to wish it were not there and pretend that it had not happened. There is a problem, not just here but in other countries, and not just with RBS but with banks across the world. We need to do something about it; otherwise we will not get lending going again. If we do not get lending going again, the recession will be longer and more painful than would otherwise be the case. That is what the hon. Gentleman ought to reflect on.

Nicholas Soames: Further to the Chancellor's answer to my hon. Friend the Member for Ludlow (Mr. Dunne), is the Chancellor clear and satisfied that he has been made aware by RBS, sector by sector, of the scale of the loans advanced by RBS that are now underwater?

Alistair Darling: As I said in my statement and in answers to questions on it, the Treasury and its outside advisers have looked in some detail at the assets that RBS has offered and has asked to have insured. As I said to the House earlier, one of our difficulties is in trying to value such assets at a time when conditions are deteriorating. We are taking action against a background that is not static; it is moving all the time. We have made every effort to ensure that those assets have been properly looked at and properly valued.

Business of the House

12.22 pm

Harriet Harman: With permission, I should like to make a statement about the business for next week:
	Monday 2 March—Conclusion of remaining stages of the Political Parties and Elections Bill.
	Tuesday 3 March—Motion to approve the draft Prevention of Terrorism Act 2005 (Continuance in force of Sections 1 to 9) Order 2009, followed by remaining stages of the Corporation Tax Bill, followed by motions to nominate Members of regional Select Committees, followed by motions relating to the Committee on Members' Allowances.
	Wednesday 4 March—Consideration of an allocation of time motion, followed by all stages of the Northern Ireland Bill.
	Thursday 5 March—General debate on supporting women and families through the downturn and building a strong and fair economy for the future.
	Friday 6 March—Private Members' Bills.
	The provisional business for the week commencing 9 March will include:
	Monday 9 March—Estimates (2nd allocated day). There will be a debate on the work of the Department for Business, Enterprise and Regulatory Reform in the current economic situation, followed by a debate on railways. Details will be given in the  Official Report .
	 [T he details are as follows: Delivering a sustainable railway: a 30-year strategy for the railways? (10th  Report  of Session 2007-08 from the Transport Committee, HC 219; Government response— e ighth special  report, HC 1105); and Departmental Annual Report and scrutiny of the Department for Business Enterprise and Regulatory Reform (14th report from the Business and Enterprise Committee, HC 1116; and Government response Cm 7559) and further Oral Evidence of 16 December, 14 January and 23 February. ]
	At 10 pm the House will be asked to agree all outstanding estimates.
	Tuesday 10 March—Opposition Day (7th allocated day). There will be a debate on an Opposition motion, subject to be announced, followed by proceedings on the Consolidated Fund (Appropriation) Bill.
	Wednesday 11 March—Remaining stages of the Business Rate Supplements Bill, followed by a motion to consider the Penalties for Disorderly Behaviour (Amount of Penalty) (Amendment) Order 2009.
	Thursday 12 March—If necessary, consideration of Lords amendments, followed by a motion to take account of the outstanding reports of the Public Accounts Committee to which the Government have replied. Details will be given in the  Official Report.
	 [The details are as follows: the 30th, the 36th, the 39th to the 41st, the 43rd to the 49th and the 51st and the 57th Reports of the Committee of Public Accounts of Session 2007-08, and of the Treasury Minutes on these Reports (Cm 7493, 7522 and 7545).]
	Friday 13 March—Private Members' Bills.

Alan Duncan: I thank the Leader of the House for giving us the forthcoming business. May I, through her, thank the Prime Minister, and indeed all Members of the House, for their sympathy and the generosity of spirit that they showed yesterday to my right hon. Friend the Leader of the Opposition, following the death of his son? In that spirit, I hope that the right hon. and learned Lady will today allow me to suspend the usual differences that we express each week across the Dispatch Box. This week, we will keep it very straightforward.
	We welcome the debate that is to take place on Monday 9 March, which will allow us to discuss the accountability of Ministers in the Lords to this House. I have raised the issue before, and I am grateful to the Select Committee that is giving over its estimates day so that we can discuss that very important issue.
	Yesterday, it was reported that Alma Harding, a 65-year-old retired postmistress, had been given a criminal record for clipping an offensive and rowdy teenager round the head with the papers from her parish council meeting. Many people have first-hand experience of the random, passing abuse that can be dished out by unruly children, and the corrosive impact that it can have on communities, and they will be angry and astonished that the case made it to court at all. May we have a debate on fairness in the policing and legal system, so that the House has an opportunity to make its own judgment on what we think its priorities should be—and then make proper law that fits our view?
	May we also have a debate on teenage pregnancy? Today's statistics are a depressing reminder that the case of 13-year-old Alfie Patten, whose example should concern us all, is not an isolated incident. We are obviously failing our children when they are raising children themselves. Is it not right that people should be taught about right and wrong, and that bringing up a child carries with it enormous responsibilities?
	Earlier this week, there were rather confusing briefings in the press about whether the Government were about to tear up their commitments on equalities legislation and on expanding maternity leave. I know that the right hon. and learned Lady takes a keen interest in those matters, so may I invite her to offer the House a statement to clarify the Government's position, and to announce any imminent changes that are intended?
	May we also have a debate on the plight of businesses in our British ports and harbours? Hon. Members will be aware of the Valuation Office Agency's plans to levy retrospective charges for business rates on about 700 companies operating in British ports, and the devastating impact that that will have at a time of deep recession. That is a cross-party issue, and many Labour Members have been particularly active in trying to prevent the widespread redundancies that will inevitably follow from that punitive tax. It is surely in everyone's interests to debate the issue properly, and to make the point that imposing such retrospective detriment is unfair and unprincipled.
	Finally, and particularly in light of the statement that we have just heard, may I once again call for a full and thorough debate on the economy in Government time? It has been yet another week of dire economic news. The scale of the problem is beginning to beggar belief. There has been a change of policy on Northern Rock, without any explanation of where the £12 billion-worth of new lending will come from. There are reports that the taxpayer will be underwriting debts to the tune of over a quarter of a trillion pounds; we have just heard some further details of that. There was also an announcement by RBS of the biggest losses in corporate history in this country. In the week when we learned that the Government are once again printing money, is it not apparent that there is a real national need to debate the crisis properly on the Floor of the House?

Harriet Harman: I agree with the hon. Gentleman's comments on the way in which Prime Minister's Question Time was handled yesterday and the suspension of questions. I think that all Members appreciated the opportunity to show their sympathy and support for the Leader of the Opposition and his family.
	The hon. Gentleman asked about the case of Alma Harding. We have all seen press reports. I remind the hon. Gentleman that although we set the law in this House, our constitution requires the law to be applied by the courts and prosecutions to be undertaken independently by the Crown Prosecution Service. I am sure that neither the hon. Gentleman nor the Opposition as a whole would want us, as elected Members, to substitute our judgment— [Interruption.] Would hon. Members allow me to finish the point? We must not substitute our judgment for the independent decision-making process in the Crown Prosecution Service.
	Although the court saw fit to give Mrs. Harding an absolute discharge, according to press reports, it did not take the option that it could have taken and require the CPS to pay her costs. Let me simply say that it is important that we all recognise that we cannot substitute our judgment for that of magistrates and justices of the peace. They hear the evidence, they must decide on the penalty, and they must decide the question of guilt or innocence. That is the appropriate position, and I do not think that the hon. Gentleman should try to make this House a substitute for a court of law.
	We are all anxious to ensure that unwanted, unplanned teenage pregnancies are reduced to as low a level as possible. That is why, in 1999, we introduced a reduction target. Over the 10 years that the strategy has been in effect, there has been a 10 per cent. drop in the rate of teenage pregnancy. I think that, given that no progress was made in the preceding two decades, this has been a decade of welcome progress. However, as the hon. Gentleman rightly recognised, that progress has been uneven around the country. According to a report published today by the Office for National Statistics, local authorities that employ a focused strategy involving everyone working together have made considerable progress, while others have lagged behind. That is why the rate of progress has dipped and now requires further momentum.
	Let me give two examples, from the hon. Gentleman's constituency and mine. In Rutland, there has been a 7 per cent. increase in the teenage pregnancy rate over the past 10 years. I suggest that the hon. Gentleman works with all the authorities in his constituency—health authorities, local authorities and schools—to back up the strategy that he clearly supports. In the London borough of Southwark, which I represent, there has been a 12 per cent. reduction in the—yes, much too high—rate of teenage pregnancy. We must do what we can in all parts of the country, which means giving information to parents on how to talk to their children about these issues, ensuring that there is good sex education in schools, and ensuring that there is good advice on, and accessibility to, contraception.
	The hon. Gentleman asked about the equality legislation, and about maternity pay and leave. As I have said, there will be a debate next week on supporting women and families through the downturn, which will give Members an opportunity to speak and hear more about the role of equality legislation in ensuring fairness and equality for women in the world of work. We will press forward with that legislation.
	I remind the hon. Gentleman that, since 1997, we have increased maternity leave from 40 to 52 weeks. We do not regard that as a burden on business; we regard it as support for families. We have doubled maternity pay from £55 to £117 a week. We do not regard that as a drain on the public purse or a burden on the taxpayer; we regard it as good support for families. Any further measures will be a subject for the Budget, which will be announced on 22 April.
	The hon. Gentleman asked for a further debate on the economy. He will have heard me announce that there would be an estimates day debate on the Department for Business, Enterprise and Regulatory Reform in the current economic situation, which will give Members an opportunity to raise issues of concern such as lending to small businesses, securing jobs, helping those who do face redundancy, and ensuring that we do all that we can to support the housing market.
	The hon. Gentleman asked about port rates. As he will know, a statutory instrument allows businesses more time to pay backdated obligations.

Derek Twigg: I have been contacted by about 25 constituents over the past few weeks about the Autism Bill, and have met a number of them to discuss the Bill and the problems of autism. I have heard some heartrending stories about the difficulties experienced, by adults in particular, in gaining access to services and support. My constituents want those services and support, along with proper planning of services, to meet the needs of children and especially adults with autism.
	A report on the website of the National Autistic Society, which I looked at this morning, states that the society is celebrating a "victory" and that the measures announced by the Government this week
	"directly respond to the Bill".
	A spokesman for the society says
	"we have achieved our major political goals."
	I am not entirely sure what the Bill will achieve that has not already been achieved. Will my right hon. and learned Friend confirm the Government's absolute commitment to delivering those improvements and to seeing them through to the end?

Harriet Harman: I can confirm that the measures taken in the autism strategy go further than those proposed in the Bill. I pay tribute to the National Autistic Society for its proposals. We are developing the strategy and consulting on it. We undertake to go as far as we possibly can and to work closely with the society.

David Heath: In response to the comments of the hon. Member for Rutland and Melton (Alan Duncan) about yesterday's events, let me simply say that I felt that the Prime Minister, the right hon. Member for Richmond, Yorks (Mr. Hague) and my hon. Friend the Member for Twickenham (Dr. Cable) expressed the House's sentiments very well. Any further words on the subject from me would be superfluous.
	We have just heard a very important statement by the Chancellor of the Exchequer on economic affairs. At the same time, the Treasury Committee was hearing evidence from the Governor of the Bank of England. May I suggest to the Leader of the House that that was not good timing and not the best use of the House's time? Of course the statement was important and of course it needed to be made today, but the order of statements prevented Members—including the Chairman of the Treasury Committee—from being present in the Chamber to hear the statement. That strikes me as unfortunate; perhaps the Leader of the House will look into it.
	While I am talking about financial affairs, I note that 9 March is to be an estimates day. Of course, the one subject that we will not debate on that day is that of the estimates that we will be asked to agree at the end of the session. On 10 March, we are to have what are misleadingly described as "proceedings on the Consolidated Fund (Appropriation) Bill". Precisely what we will not have are proceedings on that Bill, because under Standing Order No. 56 we cannot debate, amend or even vote on it. That, in my view, underlines the failure of the House to undertake properly its scrutiny role in relation to expenditure. We have escalating spending, escalating debt and an escalating contingent liability. Never has so much been spent by a Government with so little scrutiny. There is an urgent need for us to reform our scrutiny of expenditure, as well as the tax arrangements, in the current Parliament.
	Experience shows that sadly, during a recession there is normally a concomitant increase in crimes such as burglary and theft. May we have a debate on police numbers? The Home Secretary has said that the overall number of police in the country has risen marginally, and she is correct. However, earlier this week, the chief constable of Gloucestershire said that in 19 police forces officer numbers had fallen. My own force area, Avon and Somerset, has lost 73 officers in the past year.
	When I was chairman of Avon and Somerset police authority, under a Conservative Home Secretary, I asked for more officers every year and was told that we could not have them. Since then we have seen an increase, but now we are seeing a decrease at exactly the time when we need officers on the beat.
	Lastly, may we have a debate on whether it can ever be justified to have a pension of £650,000 a year—three and a half times the Prime Minister's annual salary, 30 times the salary of the people in the call centres and the telling staff who are being sacked this week from the same organisation, and 140 times the basic state pension? When a public company is involved, can that level of expenditure ever be justified—or is it, as I suspect, corporate theft?

Harriet Harman: We had to bring the statement to the House as soon as we could. The Treasury Committee was undertaking an important inquiry at the same time, so its members could not be present in the Chamber. That is unfortunate, but it was not readily avoidable. However, I take this opportunity to say that that Treasury Committee inquiry shows the Select Committee system at its best, doing a very important job on behalf of the public interest, and I pay tribute to its Chairman and all its members. We await their report with interest. They are performing an important public and parliamentary service.
	The hon. Gentleman thinks that we could scrutinise the spending of Departments better. Perhaps he, the shadow Leader of the House and I should meet to discuss whether we can find agreement on a way to improve the processes. I think that he has a point, but I am not quite sure what the solution to it is.
	There has been, on average, a 16 per cent. increase in resources to police authorities, so I am unclear how there could be a cut in police numbers in the hon. Gentleman's area. There has been a debate on law and order this week, in which I know those issues were widely aired.
	Finally, the hon. Gentleman asked whether the pension he mentioned can be justified. I can answer that by saying no, it cannot be justified to have a pension from the age of 50 of £650,000 a year, especially if there is any question of its being financed at public expense.

Phyllis Starkey: May we have an opportunity to debate the location of the medical examination centres for benefit claimants used by the Department for Work and Pensions? From a written answer from the Department, I have learned that more than 3,300 individuals from the Milton Keynes postcodes were asked to go for medical examinations in 2008, and forced to travel to either Aylesbury or Luton, both of which are extremely difficult to get to from Milton Keynes by public transport. Obviously, such people often do not have their own transport, or cannot use it. May we have an urgent re-examination of the arrangements and relocation of medical centres, so they are near where the claimants are, instead of in some bizarre, historical, random location?

Harriet Harman: I shall draw this matter to the attention of my right hon. Friend the Secretary of State for Work and Pensions, and if my hon. Friend finds that the response is not satisfactory in relation to her constituents, she might think of seeking a Westminster Hall debate on the subject.

Michael Spicer: How does the right hon. and learned Lady plan to protect MPs from spurious negligence litigation?

Harriet Harman: A great deal of consideration is given to how we deal with this matter. At the last business questions, I set out the approach in principle that I think that we should take. The solution I would propose involves the role of the Speaker, perhaps joining as a party to encourage the court to recognise that it needs to strike out its original judgment. I feel that we have a duty of care to our constituents: that is a duty in our code of conduct. We are accountable: we are accountable to our electors at general elections. We are not accountable to the courts, except in respect of the criminal law, contract law and employment law. The judgment on how we have responded to our constituents is not for the judiciary; it is for every single elector and our constituents.

Clive Efford: May I echo the call of the hon. Member for Rutland and Melton (Alan Duncan) for a debate on fairness in policing, because we now have a situation in London where if someone happens to be a friend or associate of Boris Johnson, the chairman of our Metropolitan Police Authority, they are likely to get a phone call from him to discuss private conversations he has had, in his capacity as chairman of the authority, with chief officers who are involved in important investigations? That is an unsatisfactory situation. The Mayor has been admonished this week by an inquiry into that question, and the MPA will now have to consider setting up protocols to control the behaviour of the Mayor of London. The matter is worthy of debate on the Floor of the House, so may we have such a debate in the near future?

Harriet Harman: That is a subject on which my hon. Friend might seek a debate in Westminster Hall or on the Adjournment, because it could involve a number of other London Members. It is a very important constitutional principle that elected members leave the police to get on with their job. We provide the resources and the legal framework, but it is not for elected members to decide who or what the police should be investigating or to seek to interfere with the conduct of police inquiries. That is totally wrong.

Philip Davies: May we have a debate on political correctness in the light of the excellent remarks made by the Secretary of State for Communities and Local Government earlier this week, and particularly in relation to schools? Despite the right hon. Lady's speech, they are currently enjoying a lesbian, gay, bisexual, trans-history month, with schools performing "Romeo and Julian". Does the Leader of the House agree that it is better for pupils to learn about "Romeo and Juliet" and Shakespeare than the politically correct "Romeo and Julian", and does she also agree with her right hon. Friend on these matters?

Harriet Harman: I do not regard myself as a Shakespeare expert, but, as far as I can remember, in Shakespearean times boys would play girls and girls would play boys, and the whole point was trying to work out which was which. As to pressing forward on equality, there will be a debate next Thursday on new equality legislation, so that we can ensure that everybody in this country is treated with fairness and respect and is not subject to prejudice and discrimination—or, indeed, cheap shots from the hon. Gentleman.

Keith Vaz: Will the Leader of the House join me in welcoming the decision of Amazon, the online sales company, to withdraw the video game "Rapelay", which, as she knows, allows players to simulate the stalking and raping of women? However, does she share my concern that it is still possible to offer for sale these kinds of degrading and deplorable video games? Also, when can we expect to have a debate on the aftermath of the Byron review, which the Prime Minister set up? Could we have that debate as soon as possible?

Harriet Harman: There are two issues on which I know the Home Affairs Committee, which my right hon. Friend chairs, has been doing important work: such video games and the violent and pornographic material they contain, and the accessibility of such material on the internet. I am aware that there is an early-day motion in my right hon. Friend's name, which has attracted a number of signatures. We will be keeping the matter carefully under review and working closely with those in the industry, as well as the Internet Watch Foundation.

Peter Bone: Will the Leader of the House say whether the Government plan to let the Autism Bill go into Committee—or do they plan to block it tomorrow?

Harriet Harman: The procedure will be dealt with in the usual way, but what autistic adults and families with autistic children are concerned about is the substance of the services they get and what financial support they can get. As far as the process is concerned, we are going ahead with the strategy and the consultation. We will just have to wait and see what happens when the Bill comes before the House.

Andrew MacKinlay: Has the Leader of the House had an opportunity to look at my early-day motion 872?
	 [That this House does not approve of the Government's proposed authorisation of a contingent liability in excess of £250,000 associated with the Defence Training Review set out in the Departmental Minute laid before Parliament on 17 February 2009, for which there is no specific authority; notes that only two copies of the Minute have been provided to the House; further notes that the Minute and the reference to it in the Votes and Proceedings for 23 February 2009 provides no information on which the House can come to a considered view on the proposed liability; and requests the Government to refrain from incurring the liability until approval has been given by a resolution of the House consequent on a thorough examination by the Committee of Public Accounts and the relevant departmental select committee.]
	Although it is headed "Contingent Liability on Defence Review Training Costs", the EDM relates to the point raised by the hon. Member for Somerton and Frome (Mr. Heath) regarding how we deal with the authorisation of expenditure.
	I discovered this week that there are things called unnumbered Command Papers, only two copies of which are supplied by the relevant Government Department to the House of Commons. One goes to the Library and the other goes to the Clerks Department; notionally, the latter is laid on the Table of the House. It seems that, in our ignorance, we nod through not just thousands but millions of pounds of authorised expenditure—a blank cheque for Departments—without any Member rumbling it. Apparently, it appears subsequently in the  Journal of the House.
	Will the Leader of the House consider how we can scrutinise this massive expenditure—it occurs some 30 or 40 times a year—so that Members of Parliament and the appropriate Committees can examine, probe and call to account the Ministers and Departments that bounce the expenditure through on a rubber-stamp basis?

Harriet Harman: There is no intention that anything involving public spending should be rubber-stamped. There is scrutiny by Select Committees and the Public Accounts Committee, and there is the scrutiny that follows the Budget. If my hon. Friend has any suggestions as to how we can more effectively scrutinise public expenditure—the point raised by the hon. Member for Somerton and Frome—we would certainly be prepared to discuss them. In the first instance, perhaps my hon. Friend the deputy Leader of the House could conduct a discussion, and if anybody wants to contribute to it, they can talk to him. None of us has any interest in anything other than making sure that every pound of taxpayers' money is properly and effectively spent.

Mark Hunter: My constituency is home to the largest clinical unit dealing with anorexics and bulimics in the whole of the north of England, yet the supply of places there is still outstripped by demand. Given the answer that I recently received to a parliamentary question about the increase in the number of young women under the age of 16 suffering from eating disorders—the number has increased by 80 per cent. in the past 10 years—does the Leader of the House not feel that the time has come to have a debate on why there has been such a drastic increase in these figures and what more can be done to help?

Harriet Harman: I will draw the hon. Gentleman's comments to the attention of my right hon. Friend the Secretary of State for Health, but it might also be appropriate for the hon. Gentleman to seek a debate in Westminster Hall on this issue. A number of other Members might like to join in that debate and to hear what the relevant Minister has to say.

David Taylor: The business statement has been going for 30 minutes, and in that time six or seven of our fellow citizens in the UK have suffered a stroke. Each year, some 150,000 people die from stroke, which is the third largest killer and the largest single reason for major disability in this country. At a conference in Leicester that I addressed on Monday, it was clear that the people there wanted the Government to return to a focus on the national stroke strategy, particularly in relation to so-called mini-strokes or transient ischaemic attacks. If treatment is provided within 24 hours for those at high risk, or within seven days for those at lower risk, it can reduce the risk of a recurrent, more major stroke by 80 per cent. or more, saving many thousands of lives. May we have a debate, perhaps in Westminster Hall, on this topic, which is sometimes not given the priority that it deserves?

Harriet Harman: That would be a good topic for debate. I very much welcome the national campaign to raise awareness of the need for fast action when a stroke occurs. The Government have kept a continued focus on the national stroke strategy—not least on the prevention measures that can be taken but also, importantly, on ensuring that in all areas the hospital response is as good as in the very best instances. Massive progress has been made recently and we want to ensure that everyone can get the very best care.

Peter Bottomley: Will the Leader of the House ask the Justice Secretary or the Lord Chancellor's Department to make a written statement on the working of the Legal Services Commission contract payments protocol? Obviously, no one expects a legal aid firm to get every minor variation paid each month, but where the standard monthly payment falls to about one quarter of the money outstanding to a legal aid firm, there ought to be a way of making sure that that payment is made. If the LSC consults the Law Society and the experts in my constituency, Jane Macdougall and Christine Campbell, it will probably find ways to make sure that the rules allow justice to be done. The Government want to make sure that debts are paid. Money is outstanding to good legal firms.

Harriet Harman: I will draw the hon. Gentleman's comments to the attention of my right hon. Friend the Justice Secretary. I do not know whether the hon. Gentleman has tabled a written question, but the detailed points might be well made in such a question before he seeks a written ministerial statement.

Julian Brazier: The Leader of the House paid a generous tribute to the Treasury Committee. May I urge her to let us debate the Committee's findings on the port rating crisis, to which my hon. Friend the Member for Rutland and Melton (Alan Duncan) referred? Is she aware that, just in the last fortnight, a written answer has confirmed that the advice to Ministers from the Insolvency Service is that the statutory instrument she mentioned does not in any way affect the requirement of businesses to enter all rates outstanding in their balance sheet? Ministers are also reminded that directors who continue to trade can face direct personal sanctions for doing so.

Harriet Harman: The hon. Gentleman will know that the Liaison Committee, consisting of the Chairmen of all the Select Committees, discusses and agrees which Select Committee reports are to be chosen for debate on the Floor of the House, and then makes a recommendation to the House.

Ann Winterton: May we have a full day's debate—in Government time, not just on the Adjournment of the House on a Thursday—on future strategy in Afghanistan encompassing the present military effort, the lack of air power, the success or otherwise of reconstruction projects and other related matters, so that Members of this House can have a real opportunity to debate the future and the possible political successes or otherwise?

Harriet Harman: We had a debate on Thursday 5 February on Afghanistan and Pakistan, a subject that the Government chose. Regular statements are made by the Secretary of State for Defence, and the topic is regularly raised in Foreign Office questions and, indeed, Prime Minister's questions. I assure the hon. Lady that I continue to look for opportunities to debate these important matters in the House.

Douglas Hogg: The Leader of the House will be aware of the evidence given to the Treasury Committee yesterday by Lord Turner, chairman of the Financial Services Authority, to the effect that the regulatory regime pursued by the FSA was based on poor instructions, that it was a bad model and that it was too light. He went on to say that that was because of pressure from the Treasury—in other words, from the present Prime Minister. May we have a statement from the Prime Minister next week on his response to those grievous allegations and, in particular, on how he can go on saying that our financial crisis was caused by problems abroad, given that it is wholly plain that he contributed very significantly to them?

Harriet Harman: As I said, the Treasury Committee is doing very important work in its inquiry. We look forward to the evidence that continues to be given to the Committee and the report that will follow, which the Government will consider carefully. As far as statements are concerned, I would like to hear a statement from the right hon. and learned Gentleman himself and the Opposition on how it is that, after baying year in, year out for less regulation, deregulation and total deregulation, they appear suddenly to be in favour of more regulation.

Alistair Burt: May we have an urgent debate on the disparity between what the Government say they are doing to help small business and the reality on the ground? On 10 December, I wrote to the Secretary of State for Business, Enterprise and Regulatory Reform, copying a simple inquiry from a constituent company in Sharnbrook, Bedfordshire about information on grants that had been announced. Having received no reply, I wrote again on 29 January, and this month I followed that up with two phone calls to the Department. After 10 weeks, there has been no reply to an inquiry about information that the company needs. What is business to make of that failure to deliver? In its own small way, is not that failure as fraudulent as what the high rollers of finance have perpetrated on the British people?

Harriet Harman: It is important that initiatives designed to provide substantive support to our vital small business sector at a time of global economic challenge work in practice for every small business that needs help. About 66,000 small businesses have had their tax deferred and all small businesses benefit in one way or another from the VAT cut and the extra money that has gone into the economy from tax rebates. The need to ensure that loan guarantees are available for reasonable borrowing is one of the reasons we produced the booklet "Real Help now for People, for Business". We have divided that up so that businesses in each region can see what help is available. If the system is not working as intended, that is very significant for the individual who needs help. I will ask the Deputy Leader of the House to take up the case and report back to me and the Secretary of State for Business, Enterprise and Regulatory Reform, so that if an individual case has hit a problem it can be sorted out, or if it illustrates a wider problem, we can deal with it.

John Bercow: My hon. Friend the Member for Congleton (Ann Winterton) rightly referred to the urgent need for a debate on the situation in Afghanistan, but will the Leader of the House allow a full day's debate on foreign affairs in Government time on the Floor of the House? She has previously indicated that she would attempt to schedule such a debate. Given that there are simmering crises in Zimbabwe, Darfur in western Sudan and Burma—to name but three—with egregious human rights abuses being committed in each case, is it not time that this House debated the British and multilateral policy response to those crises?

Harriet Harman: The hon. Gentleman adverts to the fact that we have recently had several debates on important foreign affairs issues, including not only Afghanistan and Pakistan but Sri Lanka. The hon. Member for Macclesfield (Sir Nicholas Winterton) and my hon. Friend the Member for Vauxhall (Kate Hoey) regularly raise in business questions the need for a debate on Zimbabwe, and we all agree that that is pressing. Although I have not been able to announce such a debate in the business for the next two weeks, I can say that we will have a debate on Zimbabwe next month. I know that the House wants the opportunity to debate that issue.
	On the wider point of a general debate on foreign affairs, there are routine general debates, and I shall have to look at that question.

Nicholas Winterton: Does the Leader of the House believe that it is appropriate to proceed with the appointment of Members to regional Select Committees at a time of dire financial crisis? That proposal will cost the House of Commons—in other words, the taxpayer—£2 million. I ask her to reconsider the appropriateness of proceeding with that proposition at this time.
	May I also thank the Leader of the House publicly for saying that we will have a debate on Zimbabwe? I think that I have heard the date on the grapevine, and we are very grateful to her for finding time for a debate on that critical subject.

Harriet Harman: Bearing in mind the enormous investment in regions—through the highways authorities, the learning and skills councils, Building Schools for the Future and new hospitals and health centres, not to mention the regional development agencies—which can have a profound effect on a region and its people, this is precisely the time when regional agencies should be more accountable for how they spend the money in their region, especially as there is even greater concern now that every pound of public money should be spent properly. I want those regional masters of the universe—the directors of those agencies that have a massive impact at local level—to be accountable to hon. Members for what they do. Therefore, the regional Committees should get to work on looking at the capital investment and the regional strategies of agencies.
	Far be it from me to suggest what any regional Committee should do, but one of the things that the Committees could do is ask these regional masters of the universe for the details of their bonuses and pension packages. That would be an increase in accountability that might have a good effect on public spending.

Julian Lewis: Will the Leader of the House convey my thanks to the Justice Minister for the help I have received from his officials in defining both the content and form of my amendment that, if Mr. Speaker selects it on Monday, will allow Members to decide whether candidates should be forced to reveal their home addresses during elections? When she is thanking the Justice Minister, will she ask for a statement from a Minister or a Law Officer about whether the law on treason still applies? I ask that in the light of yesterday's serious reports that British passport holders are operating in war zones and attacking British service personnel. It needs to be made clear to anyone who seeks or holds a British passport that such activity is not only criminal, but treasonable.

Harriet Harman: I will ask the Attorney-General to write to the hon. Gentleman about the enforceability of different aspects of our domestic law in respect of overseas actions. She can set out the full position for him.
	I will convey the hon. Gentleman's comments to the Justice Secretary, but I wish to thank the hon. Gentleman for his work. He has tabled a good amendment that, if selected and accepted, will make it clear to electors in which constituency candidates live without forcing candidates to reveal their addresses if they do not want to do so. That is a very sensible amendment, and I understand that Labour Members will have a free vote on it. If it is selected, I shall certainly vote for it.

Philip Hollobone: May we have a statement on the pernicious effects on local economies of the abolition of empty property relief for business rates? My constituent, Mr. Chris Brigstock, runs a local property development company and next week he will have to dismantle one of his warehousing facilities because he simply cannot afford to pay the business rates on it and he does not qualify for the temporary relief scheme that the Government have introduced. Economies such as Kettering cannot afford the loss of local infrastructure, and it is entirely due to Government legislation.

Harriet Harman: I know that the Treasury is keeping this issue under review and I suggest that the hon. Gentleman write to the Chancellor of the Exchequer with details of the company concerned to see whether any wider lessons can be drawn from its experience.

Records of Detention (Review Conclusions)

John Hutton: Before I begin my statement, I should like to pay tribute to the three soldiers from 1st Battalion The Rifles who died on operations in Afghanistan yesterday, and to the Royal Marine from 45 Commando who died yesterday from wounds received earlier this month. Today is a sad day for our armed forces and a reminder of the exceptional challenge that our personnel meet with such extraordinary resolve every day. We owe our security to these brave servicemen and women, and I am sure that the whole House will join me in sending condolences to the families and friends of those whom we lost yesterday.
	I wish to make a statement on the results of a recent Ministry of Defence review of records of detention resulting from security operations carried out by UK armed forces in Iraq and Afghanistan. It is, I believe, essential that our armed forces are able to detain people who pose a real threat to our troops, our allies or the local population whom we are seeking to protect. These operations are conducted by our forces with courage, integrity and professionalism. In undertaking them, we take fully into account our obligations under international law.
	In February last year, allegations were made that persons captured by UK forces in Iraq were transferred to US detention facilities and were mistreated and removed unlawfully from Iraq. My predecessor, my right hon. Friend the Member for Kilmarnock and Loudoun (Des Browne), rightly launched a review, and much of the work was led personally by a very senior British Army general. My right hon. Friend was right to satisfy himself that appropriate procedures were in place to ensure that persons captured by UK forces and transferred to US detention in Iraq were treated in accordance with UK policy and legal requirements. Separately, he also set in hand work to examine all available documentary material relating to detention operations in Iraq and Afghanistan, and to review the parliamentary record.
	The Ministry of Defence has now completed a detailed review of records of detention in Iraq and Afghanistan since the start of each campaign. I am today placing in the Library details of all detentions in southern Iraq in each year since 2003.
	In Iraq, we have reviewed the record of detainee numbers listing all individuals held in UK detention facilities, first at the Shaibah logistics base and subsequently at the contingency operating base at Basra. In December 2003, when the facility at Shaibah was first opened, records show that 105 internees captured by UK forces were transferred into it from US custody at Camp Bucca. A further 19 were released at that stage. After December 2003, an additional 546 individuals were interned in these facilities. The majority, 491, were released once it was judged that they no longer represented an imperative threat to security, while 141 were transferred to the Iraqi authorities. A further 12 escaped, six were transferred to US detention facilities and, as hon. Members will know, one sadly died in custody.
	In conducting this review, it became apparent that, in three parliamentary answers since February 2007, Ministers had overstated by approximately 1,000 the numbers of detainees held by UK forces in the period since January 2004. Nine further answers contained minor inaccuracies. I have written separately today to hon. Members setting the record straight, and I have also placed copies of the letters in the Library of the House. I want to apologise unreservedly for these inaccuracies.
	We have also reviewed our records of detentions in the period from March to December 2003, when large numbers of individuals were captured by UK forces during the initial, high-intensity combat phase of the operation. Many of them were held for very short periods or were transferred to the US facility at Umm Qasr and then released. This facility was run by the UK from late March to mid-April 2003, at which point it was transferred to US control.
	Given the circumstances in which the database was compiled, we cannot be confident that the data that we hold today are entirely complete. On a small number of occasions, answers or statements provided by my Department have included figures relating to the position in 2003 that indicated that we initially held up to 5,000 Iraqi prisoners during that period. However, a significant number of these were held on behalf of other coalition forces. We now believe that UK forces transferred around 3,000 individuals to the detention facility at Umm Qasr between March and December 2003, but I would ask the House to treat this figure as a best estimate.
	In areas outside multinational division south east, UK forces have undertaken operations to capture individuals who were subsequently detained by the United States. These individuals do not feature in the data that I have set out today, but I want to reassure the House that the review has concluded that UK forces have exercised appropriately their responsibilities towards all captured personnel handed to US custody, whether in Multi-national Division (South-East) or elsewhere, and that it has uncovered no evidence of mistreatment.
	During the final stages of the review of records of detentions, we found information about one case relating to a security operation conducted in February 2004. I am sure that hon. Members will recall that that period saw an increased level of insurgent activity as the transfer to Iraqi sovereignty drew closer. During the operation, two individuals were captured by UK forces in and around Baghdad. They were transferred to US detention, in accordance with normal practice, and subsequently moved to a US detention facility in Afghanistan.
	This information was brought to my attention on 1 December 2008, and I instructed officials to investigate the case thoroughly and quickly so that I could bring a full account to Parliament. Following consultations with US authorities, we confirmed that they transferred the two individuals from Iraq to Afghanistan in 2004 and they remain in custody there today.
	I regret that it is now clear that inaccurate information on this particular issue has been given to the House by my Department. However, I want to stress that that was based upon the information available to Ministers and those who were briefing them at that time. My predecessors as Secretaries of State for Defence have confirmed to me that they had no knowledge of these events. I have written to the hon. Members concerned correcting the record, and am placing a copy of these letters also in the Library of the House. Again, I want to apologise to the House for these errors.
	The individuals transferred to Afghanistan are members of Lashkar-e-Taiba, a proscribed organisation with links to al-Qaeda. The US Government have explained to us that those individuals were moved to Afghanistan because of a lack of relevant linguists to interrogate them effectively in Iraq. The US has categorised them as unlawful enemy combatants and continues to review their status on a regular basis. We have been assured that the detainees are held in a humane, safe and secure environment that meets international standards that are consistent with cultural and religious norms. The International Committee of the Red Cross has had regular access to the detainees.
	A due diligence search by US officials of the list of all those individuals captured by UK forces and transferred to US detention facilities in Iraq has confirmed that this was the only case in which individuals were subsequently transferred outside Iraq. This review has established that officials were aware of the transfer in early 2004. It has also shown that brief references to this case were included in lengthy papers that went to the then Foreign Secretary and the Home Secretary in April 2006. It is clear that the context provided did not highlight its significance at that point to my right hon. Friends.
	In retrospect, it is clear to me that the transfer to Afghanistan of these two individuals should have been questioned at the time. We have discussed the issues surrounding this case with the US Government. They have reassured us about their treatment but confirmed that, as the individuals continue to represent significant security concerns, it is neither possible nor desirable to transfer them to either their country of detention or their country of origin. The UK no longer has power to detain suspects in Iraq, and only limited powers of detention in Afghanistan.
	For Afghanistan, robust checks have confirmed that we have detailed and precise numbers of all those detained by UK forces since we deployed Task Force Helmand in July 2006. As of 31 December 2008, our database holds the capture details of 479 individuals, including 254 who were subsequently transferred to the authority of the Government of Afghanistan, 217 who were released, and eight who died as a result of injuries sustained on the battlefield.
	We hold capture details relating to a total of a further seven individuals detained by UK forces between 2001 and April 2006, and I believe that this represents a complete record. I am also placing the complete details of the detainee numbers for Afghanistan in the Library of the House.
	Our detention operations in Iraq and Afghanistan are underpinned by arrangements with our international partners. We have a memorandum of understanding in place with the Government of Afghanistan, signed on 23 April 2006, covering the treatment of individuals detained by UK forces and transferred to Afghan custody. We also have a memorandum of understanding with Iraq, agreed on 8 November 2004, on the treatment of detainees transferred to Iraqi custody. Iraqi Interior, Justice and Defence Ministers have confirmed to us that Iraqi detention procedures remain consistent with the principles set out in that memorandum of understanding.
	For the initial stages of the campaign in Iraq, we also had in place a memorandum of understanding with the US and Australian Governments covering arrangements for the treatment and transfer of detainees. We worked on the mutual understanding that the key provisions of the memorandum of understanding continued to apply until it was replaced last year by a further memorandum of understanding with the US. We have also confirmed with the US that the provisions on arrangements for the treatment and transfer of captured prisoners remain under the new legal framework in Iraq and that no person captured with assistance from UK forces will be removed from the territory of Iraq without prior consultation with the UK.
	Let me make a final observation. We ask our armed forces to operate in highly dangerous environments, where there is often a limit to the capacity of local agencies to enforce security and the rule of law. In those circumstances, it is essential that we provide our forces with the authority and capabilities to deal effectively with individuals who represent a serious threat to our troops or those they are there to protect; the two detainees to whom I referred earlier fall into that category. We recognise the sensitivity of detention operations. We have put in place rigorous safeguards to ensure that detainees are treated properly. We will continue to carry out detention operations in accordance with our legal and policy obligations, in concert with the US and other allies. This is, and will remain, absolutely central to the way our armed forces conduct these vital operations.

Crispin Blunt: May I fully associate the Conservative party with the Secretary of State's comments about the deaths of the four soldiers yesterday? It was a black day for the armed forces, and it was particularly sobering for me as my old regiment is shortly to go to Afghanistan. I entirely associate the Conservative party with the comments made by the Secretary of State at the end of his statement, when he made clear the challenge faced by the armed forces on operations overseas in very difficult circumstances.
	I thank the Secretary of State for giving me early sight of the statement and I note that it follows the undertaking in his letter of 17 November to the Chairman of the Defence Committee to answer the questions put to him by the Chairman and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in the sitting that he had three weeks earlier with the joint committees. It is a serious concern that there is an underlying charge of complicity with serious abuse of people detained by British forces on operations overseas. Properly, I presume that it is to address that charge that the Secretary of State has decided to come to the Chamber to make an oral statement, and we thank him for treating the issue with the seriousness that it deserves.
	Much of the Secretary of State's statement dealt with the transfer of two members of Lashkar-e-Taiba to Afghanistan in 2004 following their capture by British forces and their being handed over to the American forces. I am grateful for his candour on the details uncovered by the review. It is clear—I know that he has had a conversation with the shadow Secretary of State, who is abroad, about this—that this is a specific rather than systemic failure. I also accept that there appears to be no legal or practical alternative to their continued detention, where they have access to the International Committee of the Red Cross and appear to be detained in proper circumstances.
	Will the Secretary of State confirm that his account contradicts the specific assurances given by the then Foreign Secretary to my right hon. Friend the shadow Foreign Secretary on 6 February 2006? It is at the very least unfortunate that both officials and Ministers overlooked the significance of the cases, not least since the issue of rendition was already highly controversial. My hon. Friend the Member for Chichester (Mr. Tyrie) had already formed his all-party group on the issue. The Secretary of State says that in retrospect it is clear to him that the transfer to Afghanistan of the two individuals should have been questioned at the time. What is his explanation for that not being done at any level and not being rediscovered until 1 December 2008?
	I acknowledge the Secretary of State's unreserved apology for overstating by about 1,000 the number of British detainees since 2004. Again, will he provide the House with an explanation for that? I visited the prison facilities in our area of operations with the Defence Committee in early 2004 and I acknowledge that they had been much improved since serious concerns surfaced about operations there in 2003, but in those circumstances I am astonished at the inaccuracy arising from conditions in 2004 and afterwards. Equally, my experience would lead me to accept that the figures for 2003 could only be an estimate.
	Let me turn to our current operations in Afghanistan. What confidence does the Secretary of State have that some of the 254 detainees handed over to the Afghan authorities have not been mistreated or tortured? On what basis does he claim in his letter to the Chairman of the Defence Committee of 17 November 2008 that there is no legal obligation to detainees once they are transferred to another state? Does he acknowledge that a moral obligation exists? Was that not implicit in the memorandum of understanding between the USA, Australia and the UK of March 2003? Why would not that wider obligation also apply between the UK, Iraq and Afghanistan?
	The statement avoids the principal public issue, which is the charge about complicity by UK forces operating in Iraq outside the Multi-national Division (South-East). That is a glaring hole and it must be addressed. I suspect that as Secretary of State he might not be inclined to thank my hon. Friend the Member for Chichester for his dogged persistence on the issue. However, I rather suspect that, as a parliamentarian, the Secretary of State will admire my hon. Friend's achievement in ensuring that the issue remains at the front of parliamentary concern. I hope that the Secretary of State will confirm that for all the difficulty that the statement brings the Government and the embarrassment at procedures that apparently undermine and sometimes disgrace our values my hon. Friend has done Parliament and our wider values proud by holding the Government to account.
	This is about more than thoroughly indifferent administration. The statement has partly been prompted by the work of my hon. Friend and, not least, by the evidence produced by the former SAS trooper Ben Griffin before he was injuncted by the Government almost exactly a year ago. Let me remind the House of the gravity of the charge. Ben Griffin said:
	"Throughout my time in Iraq I was in no doubt that individuals detained by UKSF and handed over to our American colleagues would be tortured. During my time as member of the US/UK Task Force, three soldiers recounted to me an incident in which they had witnessed the brutal interrogation of two detainees. Partial drowning and an electric cattle prod were used during this interrogation and this amounted to torture. It was the widely held assumption that this would be the fate of any individuals handed over to our America colleagues. My commanding officer at the time expressed his concern to the whole squadron that we were becoming 'the secret police of Baghdad'."
	How is the public interest served by the injunction when Ben Griffin had left the Army over two years earlier and had made numerous public statements on the nature of those operations in 2006, when he left, and on the role of UK forces in detaining Iraqis and other suspects? The injunction did not come until two years later. Surely, given the serious nature of his allegations and the time elapsed since his operational experience, his account should be publicly scrutinised. The Secretary of State must be prepared to answer those charges.
	Exquisite detail about official and ministerial oversight concerning two men is all very well and it is appreciated, but it sits ill with simply sweeping under the carpet the apparent evidence of direct British service involvement with delivery to gross mistreatment amounting to torture involving hundreds if not thousands of people. The evidence available is that the conduct of American forces has significantly improved since Ben Griffin served in Iraq, but the country is owed an account of what happened. Nothing does more to undermine our fight against terrorism and violence than departing from the rule of law and the values that we seek to defend. That does the terrorists' work for them. Is that not further cause for the Government finally to set up the comprehensive inquiry into Iraq without any further delay?

John Hutton: I welcome some of the hon. Gentleman's early remarks, although I did not agree with some of the remarks towards the end of his questions. I think that with hindsight and the ability to reflect on them he might well want to say something different at some point in the future.
	I want to pay tribute to all hon. Members, on both sides of the House, who have championed the issue. I agree with the hon. Gentleman about the importance of UK armed forces and HM Government as a whole operating firmly within the framework of the rule of law. These are our values, and we seek to uphold them throughout the world. We have made every effort to do so in operations in Iraq and Afghanistan.
	Let me deal with some of the specific points that the hon. Gentleman mentioned. There is no truth whatsoever in any allegation that British officials were complicit in the abuse of these two individuals. There is no evidence of abuse in relation to these two individuals and I made that very clear in my statement. I was surprised that the hon. Gentleman suggested that that was not the case. There were errors in relation to the records on the two individuals, which largely explains why the approval of the UK was not sought about their transfer in 2004. My understanding is that the records of the US authorities had those two individuals down as detained by US forces, not UK forces, and I think that largely explains the error, but it should not have happened.
	The hon. Gentleman asked me specifically about errors in detainee records in Iraq. The best explanation that I can offer him, because it is the best one I have seen—that has come to me—is that there was significant double counting at the time in respect of records on detainees. We have put that right, and Permanent Joint Headquarters now maintains one central database, which is regularly updated, and we have dealt with that particular problem.
	The hon. Gentleman asked about the legal position of the two detainees. I have to say that it is far from clear. I do not want to opine on the subject of the legality or otherwise of the position of those detainees—I am not in a position to do so—but I strongly welcome the review that the President of the United States recently announced about detention policies across the range of operations in which US forces are engaged. I am sure the whole House will welcome the outcome of that review.
	I am afraid that the hon. Gentleman and I began to part company when he ended his comments with allegations that Ben Griffin has made about abuse. The hon. Gentleman gave the very strong impression that he thought that those allegations were true and correct. There is no evidence to substantiate those allegations. They have been looked at by a very senior serving British Army general, who found no evidence to support them. It is important that the point is re-emphasised; I tried to deal with it in my statement, so I was surprised that the hon. Gentleman raised it in the way he did.
	The hon. Gentleman referred to the injunction against Ben Griffin as though it were some constitutional outrage. Every member of the special forces agrees a confidentiality deal when they sign up, and if the hon. Gentleman ever has the responsibility of standing at the Dispatch Box to deal with such matters he will find that that is for a very good reason: it preserves the safety and security of special forces operations, and it must not and should not be challenged in the way that the hon. Gentleman challenged it. That is a mistake and he will rue the day if that is the view he takes into government, should he be given that opportunity.
	I finalise my comments with this point: we are not sweeping anything under the carpet. The hon. Gentleman implied that today we were somehow sweeping things under the carpet—he used that expression. It is simply not true. We have extended an open hand and an open invitation to people to come forward and confirm those allegations. None has done so.

Nick Harvey: I echo the words of condolence that the Secretary of State rightly gave for those who died yesterday. I thank him for his statement and like him I sympathise with the plight of those who have to make difficult decisions in the chaos of the battlefield.
	The Secretary of State has come to the House today and presented the conclusions as comprehensive. Will he guarantee to the House that every record and every piece of information held by any element of the British Government armed forces, security and secret services and so on has been scrutinised exhaustively and that this is indeed the last word on the matter? At the heart of it is our relationship of trust with the United States. Does he agree that the new Administration in America now acknowledge that things happened in the past that should not have happened, which they are defining as torture, for example, whereas the previous Administration denied that emphatically? Were not most of the assurances on which we are relying in the account the Secretary of State has given us today in fact assurances given by the previous Administration?
	If the memorandum of understanding between us and America, on which we are relying, was as strong as the Secretary of State invites us to believe, how was it so easily pushed to one side in this specific case? Did the British Government really buy the explanation that the US, with hundreds of thousands of personnel out there in its hunt for al-Qaeda operatives in Iraq, did not have a single person in the country who could speak the relevant Pakistani language, and that that amounted to an adequate reason to move the detainees elsewhere? Have we explicitly asked the Americans whether anybody handed over was at any point tortured or water-boarded? What is our policy for our personnel? Are British personnel explicitly told not to be complicit in abduction, rendition or torture?
	Perhaps the most disturbing thing in the statement was the fact that information was available and made available to the then Foreign and Home Secretaries, so in a sense it was missed at the time. Were the lawyers asleep on the job? Did they not come back later and give legal advice? As the temperature on the issue rose, with allegations of extraordinary rendition and the use of Diego Garcia for flights, did no official revisit the information that had been given to Ministers and draw their attention explicitly to it?
	My final point relates to the allegations made a year ago by Ben Griffin. Looking closely at what he said, we see that he was talking about joint operations, with UK and US troops working alongside each other. In the statement today, the Secretary of State gave a detailed account about people who were detained by the British, but later in his statement he said that, in the new arrangements that have existed since 1 January, we have probed with America their arrangements for treating people captured with assistance from UK troops. I ask myself whether there were instances when UK troops actually captured people but from the very word go they were deemed to be held by the Americans. I wonder whether the Secretary of State can reassure me that that is a distinction that does not really exist, because it seems to me that Ben Griffin's allegation may be slightly different from the explanation that the right hon. Gentleman has given today.
	These are very serious issues. The statement raises almost as many questions as it answers. The Secretary of State took the Conservative spokesman to task, saying that the hon. Gentleman might come to rue some of the things he said. I should like the Secretary of State to reassure the House that he is absolutely confident that nothing will come to light subsequently, either from more whistleblowers or investigative journalists, that might cause him or any other Minister in the future to have to come back to the Dispatch Box and acknowledge that we have not had as comprehensive a version of the truth today as he might like to think.

John Hutton: I thank the hon. Gentleman for his opening remarks about the members of the UK armed forces who lost their lives recently in Afghanistan. I appreciate what he said.
	I reassure the hon. Gentleman and his hon. Friends that we have looked in very great detail into the records of detention arising in both Iraq and Afghanistan that involve UK armed forces in whatever category and in whatever role. I believe, because we spent a lot of time on it before I came to the House today, that the review is as comprehensive and as thorough as it can possibly be.
	On the hon. Gentleman's points about the two Lashkar-e-Taiba detainees, I have tried to explain the circumstances of that case and the error in the way that the records were maintained that gave rise to the failure to consult the UK properly. I do not really have anything further to add, other than to say again that I bitterly regret the mistakes that were made; in retrospect, things should have been done differently.
	The hon. Gentleman asked about the operational framework for UK armed forces. It is made absolutely clear that UK armed forces will not participate in operations where there is a danger or a risk of inhuman, degrading or cruel treatment for individuals. We operate to a very high standard. It is right that we do so, because as I said earlier those values define the nature of our country, and our armed forces are part of that and reflect it. We have always stood on the side of human rights and freedom and we shall continue to do that.

Several hon. Members: rose —

Madam Deputy Speaker: Order. I appreciate the significance of the statement and the interest of Members, but the main business of the House is still to follow, so I ask for brief supplementary questions and a concise response.

Andrew Dismore: I thank my right hon. Friend for his statement, which is helpful. Can he confirm whether, when the two Lashkar-e-Taiba people were handed over, British forces knew or suspected that they would be held anywhere other than Iraq? Can he confirm that they were not subjected to water-boarding, because our view is very different to that of the Americans? Can he let us know whether we received any intelligence or information from the interrogation of those suspects in Afghanistan?

John Hutton: I can confirm that we have had no evidence of abuse in the treatment of the two individuals. I understand the position to be that we had no information at the time they were detained that they would subsequently be sent to Afghanistan.

Andrew Tyrie: Is it the case that, in a number of operations, a small number of US soldiers are attached to British forces, so that subsequent detainees are classified as US detainees from the start? I hope that the Secretary of State will understand that, among the all-party parliamentary group on extraordinary rendition, there is great disappointment that such statements have to be made.
	I began some years ago to make a number of very serious allegations that Diego Garcia had been used for rendition, that armed services were being dragged into that, and that the security services had facilitated rendition. All those allegations were vigorously denied, and all of them have been confirmed in three ministerial statements over the past year and by a High Court judge. Given that all those assurances were baseless, I hope that he can understand that we have less confidence than we did in assurances being made now. Will the Government now agree to instigate a more comprehensive inquiry to bring closure to this sad and sorry business?

John Hutton: I pay tribute to the hon. Gentleman for the honourable and distinguished role that he has played in highlighting these issues, and I have no issue in that regard at all. He raises an important point that goes to the heart of the matter. His question raises a concern about the accuracy of the records that we have been reviewing. I remind him that the two individuals who are in focus were classified in the records as detained by US forces and that that came to light because of the review of all the records where UK and US forces worked together in joint operations. I understand what he says, and I want to reassure him, as far as I am able today, that this has been a thorough and comprehensive review that has got right to the heart of the issue.

Paul Flynn: Does my right hon. Friend agree that those who caused the awful deaths of our soldiers, which increased by four this week, do not differentiate between various Ferengi? We are all in the same group of alien invaders to their country. One group—America, under Bush—was certainly responsible for torture, with water-boarding and other methods, and that deep sense of grievance is the recruiting sergeant for the Taliban and al-Qaeda. Should not we in this country embark on a new policy? That is happening in America, which is turning its back on the previous policy of Bush and seeking a new peace strategy that will be based on talks with the enemy. Is it not time that we also embarked on a peace strategy?

John Hutton: I do not accept my hon. Friend's characterisation of coalition forces as alien invaders. They are working under the clear authority of a succession of UN Security Council resolutions and have operated for many years in Iraq under the explicit authority of a UN Security Council resolution. Our approach in Afghanistan does not just involve the use of military means, but I do not believe that it will succeed without the use of military means. There is a chronic lack of security in Afghanistan, and we need to correct that, but we are pursuing a range of strategies in Afghanistan to bring about what he and I both want: an end to hostilities and a resumption of peace and democracy in that country.

David Davis: I commend the Secretary of State for coming to the House and facing this issue today—he did the right thing in doing so—but he is handicapped by the fact that, as my hon. Friend the Member for Chichester (Mr. Tyrie) said, this is the latest in a series of issues where the Government have been less than straightforward. With Diego Garcia, the Intelligence and Security Committee was given information that turned out to be wrong. The ISC raised the Gambian issue, where the rules were broken quite clearly. In the Binyam Mohamed case, the ISC was not given the 42 documents until very recently and not when it was said that that would happen. A dispassionate observer would think that there are one of three explanations. First, the Government are deliberately turning a blind eye. I hope that that is not true. Secondly, possibly, the covert agencies are using deniability to operate outside the law. We hope that that is not true. Thirdly, there is a reprehensible lack of control of our agencies in their operations abroad.
	The Secretary of State was wrong about one thing in what he said. Our responsibilities on torture with respect to our prisoners are absolute under international law and British law. That responsibility means that he has to meet my hon. Friend's request for an inquiry that covers all these issues.

John Hutton: I am grateful to the right hon. Gentleman. He speaks with a lot of personal experience, and I want to acknowledge that, too. He raised the point about further inquiries, as did the hon. Member for Chichester (Mr. Tyrie), and referred to the Intelligence and Security Committee. I want to make it clear that we briefed the ISC pretty fully on a range of issues to do with rendition and the involvement of the two individuals in that wide sweep of operations. That evidence was brought to the ISC's attention as it prepared its report on rendition, which was pretty thorough and comprehensive, and the right hon. Gentleman would have read it very carefully. The ISC has looked very carefully at these issues of rendition, and we have not withheld information. The review that we have instigated in the light of Mr. Ben Griffin's allegations has been thorough and comprehensive. So we are doing all that we possibly can to expose problems when they have arisen, to provide a very strong justification for UK forces—whether special forces or otherwise—to have the ability, the power and the means to detain people who mean us serious harm and have the intention to do so. In that, I have been completely honest and frank with the House today.

Andrew MacKinlay: I thank the Secretary of State for his candour and diligence in this matter. I should like to focus on the narrow issue of parliamentary accountability, with particular reference to the fifth and eighth paragraphs on page 2 of the statement, which relate to the way that the matter of the two individuals was reported to the House. Was the omission—the wilful ignorance—that of the officials in his Department or that of members of the security and intelligence services? People have laughed at me before when I have said that the security and intelligence services are unaccountable and out of control, but this case underlines yet again the fact that either they or people in his Department do not understand the importance of candour to Parliament.
	I fully accept that the Home and Foreign Secretaries reasonably did not take full cognisance of what was flagged up to them in documents. The duty was with the officials either in his Department or in the security and intelligence services. I want to know whether people have been disciplined and whether the Intelligence and Security Committee, which is seriously deficient and not a parliamentary committee, will at least look at the error. Parliament was misled; Ministers were misled. It is a very serious matter.

John Hutton: It is a serious matter, and that is why I am here today to try to respond to it. I have tried to explain to the House today how the errors and mistakes arose. I have nothing further that I can say to my hon. Friend to add what I said in my statement. I am, however, absolutely clear about one thing: Ministers in my Department acted in good faith at all times, and so, I believe, is the case for my officials, who acted on the basis of the information that they had at their disposal. In relation to Ministry of Defence officials, there is no question whatever of any disciplinary action being taken.

Menzies Campbell: The Secretary of State gave a very careful answer a moment or two ago, when he said that the Government had no information about the treatment of the two men, but I hope that he will address a further question. What inquiries did the Government make when they were being given assurances? In particular, what inquiries did they make about the forms of interrogation to which those men may have been subject? In further particular, did the Government ask whether either of those men had been subject to water-boarding?

John Hutton: Inquiries have been made, and I am quite satisfied on the basis of the information that has reached me that there is no substantiated evidence of the mistreatment or abuse of those two individuals.

Ben Wallace: We should not forget that some of the individuals who have been captured pose a very significant and dangerous risk to our armed forces and British interests. Can the Secretary of State confirm that, when special forces go in to capture a target, they do so only after intelligence is analysed and upholds a standard to suggest that those individuals pose a serious threat to our country's and our forces' interests? Does he not recognise that, if such a muck-up is to be avoided, the best way forward is to have an Intelligence and Security Committee that has a proper ability to investigate our agencies and to drill into such requests, so that our agencies do not go freelance and that our forces are better protected in future?

John Hutton: It is very important when we are conducting these security operations that there is a clear policy framework and that everyone understands the nature of the jurisdiction in which they operate and is aware of the legal parameters in which their behaviour could be ultimately judged. We make very great efforts to ensure that that is the case. I agree strongly with the hon. Gentleman about the importance of these security operations. None of us in the House should be under any illusion: we are dealing with some extremely dangerous people who mean us, our values and our way of life serious harm, and we are entitled to protect ourselves against them.

Peter Bone: I am grateful to the Secretary of State for the frank statement that he has made. To put some balance into the picture, every day, British personnel risk their lives to rescue Taliban who are injured on the battlefield. RAF personnel fly in and bring them back to be patched up in hospital, and their lives are saved, although they may be interrogated afterwards. Our forces are doing a fantastic job, not only protecting our troops but recovering injured Taliban as well.

John Hutton: I am grateful to the hon. Gentleman. I was trying to strike that balance, but he has done it better than I did. Our forces operate in a humane environment. They are deeply humane men and women, and it is right that he should pay tribute to them.

Sarah Teather: My constituent Jamil el-Banna was rendered from the Gambia to Bagram, where he alleges that he was tortured, so the Secretary of State will forgive me if I am left rather uneasy by his assurances to the House today that the two individuals were treated humanely. Further to the questions of my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) and my hon. Friend the Member for North Devon (Nick Harvey), may I ask whether the reassurances that the Secretary of State has been given by the US were given under the current or previous US Administration? Furthermore, he did not specifically answer the question about whether he made inquiries about water-boarding or torture.

John Hutton: Our discussions with US officials date from early December and have only recently concluded.

Christopher Huhne: Will the Secretary of State say what inquiries had been made on behalf of the Ministry of Defence? Neither my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) nor my hon. Friend the Member for Brent, East (Sarah Teather) got a straight answer when they asked that question. The Secretary of State did say that there was no substantiated evidence of mistreatment, but was there any evidence? Can we strip away any mealy-mouthed adjectives? Was there any evidence whatever of mistreatment?

John Hutton: No.

Welsh Affairs

[Relevant Documents: The First Report from the Welsh Affairs Committee, on Cross-border provision of  public services for Wales: Further and higher education, HC 57, and the Second  Report from the Committee, Globalisation and its impact on Wales, HC 184 .]

Paul Murphy: I beg to move,
	That this House has considered the matter of Welsh Affairs.
	Before starting today's debate, I would like to extend, through the hon. Member for Chesham and Amersham (Mrs. Gillan), the thoughts, prayers and sympathies of everyone in Wales, of all political persuasions—I am thinking particularly of Welsh Members of Parliament—to the right hon. Member for Witney (Mr. Cameron) and his family at this difficult time for them.
	You are a serious Welsh lady, Madam Deputy Speaker. Like you, I am glad to be present at this annual Welsh day debate. It is sometimes called the "St. David's day debate", but as hon. Members know the feast day of that saint is Sunday. Today is, in fact, the feast day of St. Isabel of France—rather appropriately, bearing in mind what might happen on the rugby field in Paris tomorrow. I am sure that we all send our best wishes to the Welsh rugby team for tomorrow.
	Each year we take this unique opportunity to debate all that is Welsh. However, this year there is little doubt that our minds have to be focused on the significant economic challenges that all of us collectively face. Wales, along with every country in the world, cannot insulate itself from the worldwide economic problems. No one could have predicted the sheer scale and speed of recent events. This is no ordinary crisis, and it is clearly not the result of the usual cycle of domestic inflationary pressures. It is the first financial crisis of the global age.
	What has changed since the United Kingdom recessions of the '80s and '90s is that it used to be thought that spreading financial risk globally would insure against it. Instead, however, the risk has impacted globally. My right hon. Friend the Chancellor of the Exchequer's statement earlier today has great relevance to that point.
	Since the '80s and '90s, there is no doubt that the Welsh economy has been dramatically transformed. As I look back at last year's debate—as we get older, I suppose that we tend to look back—I remember that I spoke about Wales's record employment, the importance of the knowledge economy and the fact that the Wales of the future will be a small but clever country. The present economic crisis is hitting us hard, but we are starting from stronger foundations than ever before. The financial crisis has caused a world recession, with consequences that are hurting individuals, families and firms right across Wales. Government action on regional, national and international—and, indeed, local—levels is required to intervene and support our economy by helping people and businesses.
	Our decisive action in October, to invest £37 billion to strengthen our banks and stop them collapsing, was vital for our economy—not for the sake of the banks, but, as my right hon. Friend the Chancellor said earlier, for the people and businesses in Wales and around Britain that rely on them. In January, we announced further measures designed to reinforce stability, to increase confidence and capacity in order to get credit flowing again. The pre-Budget report in November additionally provided a £20 billion injection for the economy, including targeted support for small businesses, a temporary reduction in VAT and support for homeowners facing difficulties. We calculate that approximately £1 billion has come to Wales because of that fiscal stimulus.

Lembit �pik: The Secretary of State knows that I am sympathetic to and fairly supportive of the measures that the Government are taking to try to lessen the impact of the economic downturn. Nevertheless, is he aware that many small businessescertainly in Montgomeryshireare experiencing serious problems because, notwithstanding the Government's investment, the banks are still reducing their overdraft facilities? That means that otherwise viable businesses have to lay off workers and may have to close as a result of the banks' reticence about maintaining lending at pre-recession levels.

Paul Murphy: I am aware of that. A week or two ago, the hon. Gentleman and I met to discuss those issues with business people from Montgomeryshire. Unquestionably, banks are not doing what they should dothat is, lend to businesses. I am thinking particularly, of course, of viable businesses. We can understand a bank being reluctant to help out a business that is far too risky and has no future, but stories reaching me from all parts of Wales show that some banks are not lending as they ought to. There is a significant issue of delivery following announcements from the Government here and in Cardiff. I shall return to it in a few moments.
	Figures show that the VAT reduction has already helped to bring inflation and prices down, putting more money into the pockets of Welsh familiesabout 275 a year for the average familyand assisting businesses. Our legislative programme for the fourth Session demonstrates our determination to equip people and businesses to deal with the economic challenges too. Taken together, the initiatives and the legislative programme represent decisive action. As the Prime Minister has said, we simply cannot walk by on the other side when decent, hard-working people are facing tough times. That is why it is important that today real help should go to our businesses, our trainers and those who face the possible repossession of their homes.
	It is so important to stress that we in Wales have a unique opportunity. The Welsh Assembly Government are taking actionmore than 1 billion is coming from Cardiff and going into businesses and helping families. That action and the measures that this Government have brought forward show that the way to tackle the problems is through the devolved Administration and the Government working together.
	That has been seen in the all-Wales economic summits, which I attend with Rhodri Morgan and Ieuan Wyn Jones and which are leading the way in dealing with the global problems affecting Wales's economy. My hon. Friend the Under-Secretary of State and I have visited businesses right across Wales to listen to accounts of the impact that the recession is having. In addition, I sit on the National Economic Council, which means that I can put the Welsh view there and go back to Wales to discuss the important issues with colleagues.
	The measures in the pre-Budget report, such as business rate exemptions on vacant business properties and additional time for firms facing cash-flow problems to pay their tax bills, came from the meeting of the first all-Wales economic summit in Cardiff some months ago. The request was made at the summit and the Governments in London and Cardiff acted. Some 2,600 businesses in Wales have been given extra time to pay tax; that amounts to about 38 million of deferred payments in Wales alone. In addition, we have taken a series of actions to unblock bank lending to small and medium-sized enterprisesthe point that the hon. Member for Montgomeryshire (Lembit pik) madealthough I believe that more is still to be done on that. Nevertheless, figures show the effect that the global economic slowdown is having on our labour market. Every time a worker loses their job, it is a personal tragedy, and we are doing all that we can to support people through these tough times.

Peter Hain: Will my right hon. Friend speak with those who are responsible for setting the precept for the South Wales police force? The chief constable gave MPs and AMs a briefing on this matter, which I attended. She has askedreasonably in my viewfor a 10-year 10 per cent. increase. That would amount in total to about 13 a year on bills. The difference between what has been allocated and what she is asking for is about 2p a day. I think that my constituents are willing to pay that to keep more police officers on the beat and to see more neighbourhood policing. Why should the precept for South Wales police continue to lag behind by about 50 compared with North Wales and 30 compared with Gwent and Dyfed-Powys? I would be grateful if he used his good offices to influence a resolution of the problem.

Paul Murphy: Like my right hon. Friend, I have spoken to the chief constable on this subject. She came to London a few weeks ago to discuss that and other matters, and he and I were present at that meeting, here in the House of Commons. Next week, when I meet the Home Secretary, I will raise these issues again. There is a strong case for South Wales police, because it is not only the biggest police force in Wales, but covers our capital city, where major events take place.
	The Government have invested 1.3 billion in Jobcentre Plus. Those investments are working alongside the policies that the Assembly is advancingReAct and ProAct. The ProAct scheme, in particular, has been of great interest, not just in Wales but beyond. That programme has started very speedily and is backed by European funds. Take-up is now startingin the past few days, at least two companies have been given a ProAct grant, and 15 others are in the process of having their applications considered. It is a uniquely Welsh programme that is very useful in ensuring that people are retained in their industries during the slowdown so that, when the changes eventually come, their industry is not badly affected and will continue, perhaps even stronger than before.

Cheryl Gillan: I am interested to know how ProAct is working. The Real help now document produced by the Welsh Assembly says that the scheme was funded by the Assembly. Can the Secretary of State confirm that the money is coming from the Assembly, not through European funding? More importantly, I gather that it is a pilot scheme from January to March and that it was supposed to focus initially on the automotive industry. I would be interested to hear about the quantitative outcomewhat it has done for that industry and how many jobs has it saved. If there are good lessons to be learned from Wales, they must be passed on to the rest of the country.

Paul Murphy: The hon. Lady is right to ask those questions. I hope that I will be able to give her a bit more detail in the course of the next week or so. As I said, two companies, one in Welshpool and one in Llantrisant, are receiving help, and 15 are under consideration. She is right to focus on the automotive industry, which is quite big in my own constituency, where workers have been put on to a three-day week because orders are not coming inpeople are not buying cars, and if they are not buying cars they are not buying brakes. Ultimately, therefore, we need to ensure that manufacturing continues for when the good time comes.
	On the financing of the scheme

Roger Williams: Will the Secretary of State give way?

Paul Murphy: Just one secondI am still answering the hon. Lady.
	The bulk of the financing comes from the European social fund as a direct consequence of what was initially objective 1 funding, but other moneyfor example, the money put into apprenticeshipscomes from Welsh Assembly funds. The scheme could be replicated elsewhere. I know that the Prime Minister is very interested in it and has given the details to the Secretary of State for Business, Enterprise and Regulatory Reform.

Roger Williams: I thank the Secretary of State for giving way and apologise for intervening at an inopportune moment.
	I understand, in a way, why we have to keep production going in the automotive industry, but surely the key is to get customers to buy the cars? At the moment, we are keeping production going and just building up stocks of unsold cars that are overhanging the market, but what we need are customers with confidence. Getting the banks to lend to individuals as well as businesses is key to that, is it not?

Paul Murphy: It certainly is. I am buying a car myself this Sunday.

Stephen Crabb: Someone is doing all right, then.

Paul Murphy: I have had to go to the banks as well.
	The hon. Member for Brecon and Radnorshire (Mr. Williams) makes an important point. There is an argument, for example, that we should be involving finance companies that deal with the car industry. That is superficially attractive, but we must bear in mind that that most cars nowadays86 per cent., I thinkare not made in Britain. In a sense, we are financing other countries by doing that, although that is perhaps an over-simplification. It is not an easy issue. However, his general pointthat we must somehow encourage people to buy carsis valid.

Lembit �pik: The Secretary of State is aware that Flowform in Welshpool has shut rather suddenly and Stadco in Llanfyllin is planning to lay off 106 workers, in both cases as a direct result of the companies to which they supply car parts reducing their business. What can the Government do to support those jobs, or does the right hon. Gentleman think that we will just have to find re-employment in other sectors for the individuals who are losing their jobs?

Paul Murphy: The Government can help in a variety of ways not only companies, but the people who need retraining in the course of the job itself or, if the business unfortunately goes under, training for other jobs. There is a variety of schemes. If the hon. Gentleman looks at Real help now, he will see at least 30-odd schemes that can help people in different ways. Ultimately, of course, some companies will not survive, but that might well happen in other times too. The question then is whether there are alternatives for people.
	I know that it is not particularly easy in rural Wales because of the nature of the communities there, but it is important always to ensure that, whatever happens, we help the person by retraining and re-skilling or by finding them another job. That is why I touched on the extra money that the Department for Work and Pensions is putting into Jobcentre Plus. There are still roughly 20,000 vacancies in Wales. Of course, they do not always fit in terms of geography and type of job when a company goes under, but it is worth remembering that there are jobs out there that we need to tap into.

Stephen Crabb: The Secretary of State is arguing that there is a unique partnership at work between central Government and the Welsh Assembly Government to protect Wales as best we can from the global economic crisis. Does he share my concern that all the statistics and data coming out of Wales at the moment show that job losses, company failures and the downturn are just as bad in Wales as right across the UK? If so, what does he think is the value of all the extra schemes that he has spent his time talking about?

Paul Murphy: If things are worse in Wales than elsewhere, it is much more important to have more schemes to help people, not least schemes such as ProAct. That scheme is uniquely Welsh, partly because the money that has come into it from European objective 1 and convergence funding came uniquely to Wales as a consequence of the British Government negotiating that deal, and partly because that deal is delivered to the people of Wales through the Welsh Assembly. That would not have happened elsewhere.
	There is a strong case for people in Wales looking to their directly elected representatives in Cardiff, as well as here, to help out. We are able to have our summits and to listen to people in a way that perhaps could not happen in a country of 50 million people, but can happen in a country of 3 million, and that gives us the opportunity to have that free flow of information between us. There is also the possibility of having very localised summitsalmost every local authority in Wales is thinking about an economic summit of its own, and some have already held them. In Newport, in my own authority in Torfaen, in Flintshire and in Anglesey, the local community is looking at how it can help itself in different ways. Local authorities can help considerably to alleviate difficulties in the local area.

Philip Dunne: The Secretary of State has been regaling the Chamber with tales of the work that the Government are doing to try to help preserve jobs in private sector entities, but would he reassure the House that he has put in the maximum effort for Government-owned agencies? I am thinking of the Nuclear Decommissioning Authority, which has been determined to press ahead with the closure of the Wylfa nuclear plant, despite the vigorous efforts of the local MP, the hon. Member for Ynys Mn (Albert Owen), who is in his place. He has tried to intervene with the Secretary of State to keep that power plant going to preserve jobs in the area.

Paul Murphy: I understand that there has been an announcement today on the extension of Wylfa, but I have worked closely with my hon. Friend the Member for Ynys Mn on the issue, and the hon. Member for Ludlow (Mr. Dunne) makes a valid point. We have to keep on talking vigorously to all the agencies that are in a position to engage and deal with employment in Wales and he can rest assured that we are doing precisely that.

David Davies: I am very grateful to the Secretary of State for giving way; he is being generous. Could he reassure people in my constituency who have heard a rumour, which I hope is completely incorrect, that the original Severn bridge is suffering from a certain amount of degradation and that there might be plans to close it? Could he assure the House that that is not the case at all, and that the community of Chepstow is safe and will always be able to travel to Bristol across that bridge?

Paul Murphy: I cannot give a reassurance about rumours, but I will certainly take the issue up with my right hon. Friend the Secretary of State for Transport and find out whether there is any truth in the rumours that are obviously going around the town of Chepstow. That is the first I have heard of the matter, but I will certainly take it up.

Adam Price: The generosity of the Secretary of State knows no bounds. I think that almost everyone has intervened now.
	The Secretary of State mentioned the importance of the economic summit. I was wondering what plans there are for members of the board of United Kingdom Financial Investments, which holds the Government's stake in the partly nationalised banks, to come to Wales to hear the experiences of businesses there. There are examples in my constituencyI am sure that this is true for other hon. Membersof businesses that have been badly treated by banks in which the Government have a stake. Could representatives of UKFI come to hear first hand the experiences of businesses in Wales?

Paul Murphy: That is a good idea, and I will certainly follow it through. The Deputy First Minister of Wales, with whom the hon. Gentleman has some connection, was talking to me only last week about getting the heads of the banks in Wales to come together to talk about banking practices and other issues raised by hon. Members, and I shall take that point up.

Cheryl Gillan: Could I press the Secretary of State to give us more details on the announcement on Wylfa? I have seen an announcement, but I thought that it related to two sites in Cumbria with RWE, and that it merely referred to Wylfa. I am not sure whether the extension to 2014 is wishful thinking or whether it has been confirmed today, and I would be grateful if he elucidated.

Paul Murphy: The Under-Secretary of State for Wales, my hon. Friend the Member for Caerphilly (Mr. David) will give more detail to the House when he makes his winding-up speech. I do not want to give information that is inaccurate in any sense, so I shall make sure that my hon. Friend deals with Wylfa in that speech.
	I have two other things to mention as far as the economy is concerned. The first is the announcement by RWE npower of plans to treble the size of its carbon capture pilot project at Aberthaw from 1 MW to 3 MW. Subject to planning permission, the construction of the 8.4 million project will begin later this year, with plans for the pilot to be fully operational by 2010. That is good news for us in Wales. It is the first pilot plant in the United Kingdom to capture carbon dioxide directly from a commercially operating power station. It will also provide a boost to the local economy and, given that the economy of our country is historically based on coal, it is excellent news for us.
	The other issue I wanted to mention, given that my hon. Friend the Member for Aberavon (Dr. Francis) is in his place, is the important work that his Committee did on globalisation. Everybody should read the report in question, and I would like to draw one part of it to the attention of the House:
	In the course of this inquiry, we have collected numerous examples of innovative practice in Wales, spanning the full range of economic sectors. These examples demonstrate that, despite the present difficulties, Wales does have the essential ingredients necessary to face the challenges of globalisation.
	That message from my hon. Friend's Committee is a good one.

Albert Owen: On the economy, I am sure that my right hon. Friend will join me in welcoming today's announcement by PV France to locate a bakery in Anglesey, creating 105 jobs. That was done working in partnership with the local authority and the Welsh Assembly Government's single investment grant. Although the Secretary of State is right to concentrate on the economic downturn that is affecting the real economy in Wales and elsewhere in the United Kingdom, and the support mechanism, there still are some good news stories, and those 105 jobs in my constituency are to be welcomed, particularly given our aims towards the Irish market.

Paul Murphy: That is excellent news for my hon. Friend's constituency and his constituents, and I congratulate him. It is good to hear about such events.
	I turn to another important issue that the Select Committee on Welsh Affairs is dealing with, which is the Welsh language legislative competence order. I have presented the proposed Welsh language order to Parliament for pre-legislative scrutiny, and I hope that hon. Members will urge their constituents to have their say on the proposals. I want to see the biggest public debate on the Welsh language of recent years, and to hear from all sectors of society in Walesthe public sector, business, the voluntary sector and the general publicto ensure that the draft order meets the needs of the people of Wales.
	When the order was published some weeks ago, some people thought that I was somewhat lukewarm on the issue of the Welsh language LCO. Indeed, this was referred to in Mr. Vaughan Roderick's blogwhich is of course written in Welsh, but has been translated for me because we have a very good Welsh language scheme in the Wales Officein which he says:
	Paul Murphy's press release on the Welsh language LCO was rather lukewarm. He said more consultation was needed and that the order could change. To use his words, 'it is not set in stone.'
	Apparently, some Labour Assembly Members were amazed by the release, but it is not the Secretary of State that is to blame:
	Don Touhig is the problem. One said, 'Don is Paul's best friend, and they spend a lot of their spare time in each other's company, and with their families, and they go on holiday together like brothers.'
	So what I have to say on the Welsh language order is all the fault of my right hon. Friend the Member for Islwyn (Mr. Touhig).
	In reality, we have come a great distance in the past 20 or 30 years on the Welsh language in Wales. When I was a lad, no one was taught Welsh in Gwentit was not on the curriculum. In my constituency today, I have three Welsh-medium schools: one secondary and two primary. Every child in Wales, and in my constituency, is taught Welsh. The best way to develop an interest in the Welsh language is for people to learn it, and for them to be taught itthat is the challenge. The best way forward, as with everything else in this regard, is to move forward by consensus. There should be a consensus among the people of Wales that we have a sensible way forward, and we should give the Welsh language an opportunity to flourish, which of course it should.
	By asking people in Wales their views on the Welsh language order, we are giving them the opportunity to express their views on a detailed document, on which this House will eventually have to decide to vote. It will do two things. It will give the opportunity to all peopleparticularly those affected by the orderto make their views known, and it will also mean that we can explain to people and reassure them about what is not in the Welsh language order. Some of the mixed correspondence that we are all getting does not reflect what is likely to be in the order. It is a draft order, which means that the Welsh Affairs Committee, chaired by my hon. Friend the Member for Aberavon, will have a proper opportunity to examine it. In doing so, it will talk to people in Wales who are involved in the matter. The Assembly itself will be able to do exactly the same thing. I have sent letters today to public bodies and others in Wales, and I will share any results of the consultation with the House and with our colleagues in the Assembly, so that we can come to a proper decision.

Cheryl Gillan: The notes that the Secretary of State has sent out accompanying the draft order set out possible effects on institutions that go beyond the Welsh borders. For example, the BBC is specifically mentioned as falling under the Communications Act 2003, and of course any Government Departments delivering services in Wales would be included in the requirements, because they would exceed the 200,000 limit. Will he consider extending the consultation to his colleagues in other Departments and to organisations such as the BBC? It seems to me that there could be an effect on both sides of the Welsh-English border and further afield in the UK.

Paul Murphy: Government Departments do of course have the opportunity to comment upon legislation. The BBC will submit a view through BBC Wales, and if it wants to comment on effects on business or broadcasting across the border, there will certainly be an opportunity. Ultimately, the consultation is about listening to people and ensuring that when we eventually introduce the order it is watertight, means what it says and is the result of the most widespread public debate possible in Wales. That is very important.

David Davies: Is not the real problem that no matter what goes into the final order, the Welsh Assembly will end up with the power to make legislation on the Welsh language, and there will be no input from Members of this House?

Paul Murphy: The order will define the parameters of what the Welsh Assembly is able to legislate on. It will stategiving considerable detail, unlike a lot of legislationprecisely what such future legislation can deal with. The establishment of a Welsh language commissioner is one example, and it is generally supported. I suspect that we will get the most letters on the issues that affect business. However, as I said earlier, the idea that a small corner shop or a small business will be affected is wrong. Certain matters might need closer and tighter definition so that we do not capture people who are not intended to be covered by the order.
	A lot of the bodies mentioned in the LCO already have sophisticated Welsh language schemes, so it will almost rubber-stamp what they already do. Nevertheless, if there are genuine concerns about aspects of the order, whether from business or the public, there will be an opportunity for people to make their views known. I very much welcome that.
	Importantly, individual Members of Parliament and of the Assembly can also hold their own consultative processes. For example, I see from yesterday's  Daily Post that Lesley Griffiths, the Assembly Member for Wrexham, has invited people to have their say on the Welsh language and write to her in her role as a member of the Legislation Committee. That is the right thing to do, and people throughout Wales will have the opportunity to discuss the legislation.
	The partnership that I mentioned earlier is very important for the people of Wales. Interestingly, the British-Irish Council met last Thursday and Friday in Cardiff, and we were able to share best practice in all parts of the UK and Ireland. For example, the Assembly Government pioneered the creation of a Children's Commissioner and free bus travel for the over-60s, to which I am now happily entitled. We have copied those things in England. Wales has learned from the experience of England how to reduce waiting times for hospital treatment, among other things.
	Ultimately, we serve the same people. Today, our annual opportunity to discuss Welsh matters enables us to ensure that, together, we serve the people whom we represent, whether we sit on a local authority, in the Assembly or in this House. We can ensure that the people of Wales are more prosperous as a result of the joint policies of both our Parliaments.

Cheryl Gillan: First, I thank the Secretary of State for his kind words to David and Samantha Cameron and their family on the death of their son, Ivan. We all share his thoughts, and David will be able to see that the Secretary of State speaks on behalf of Wales in passing on those best wishes to him on this sad occasion.
	I apologise to the Under-Secretary of State for Wales; sadly, I will not be here for his winding-up speech and his exchange with my hon. Friend the Member for Clwyd, West (Mr. Jones). I mean no discourtesy; my timetable has become a little hectic today, and I will be on my way to Wales when he addresses the House.
	I should like to continue in the spirit in which the Secretary of State opened this St. David's day debate. Since we last celebrated St. David's day, some things have not changed in Wales. First, the brave men and women of our armed services are still defending our interests abroad. My hon. Friend the Member for Aldershot (Mr. Howarth) will be visiting the Welsh Guards based in his constituency, who I understand will shortly depart for Afghanistan. I am sure that, on St. David's day, all our thoughts are with them and their families. All our thanks go to the Welsh men and women who are serving our country so bravely abroad in our armed services.
	I am delighted that we have something else that has not changeda rugby team on the rise, with the prospect of a second consecutive grand slam. I am delighted that the hon. Member for Ynys Mn (Albert Owen) has new baking facilities in his constituency and brand new jobs. I hope that they are not making French breadas the Secretary of State said, I hope that they are making Welsh cakes instead. We have had another set of elections since the last St. David's day, and I am pleased to say that yet more people in Wales chose to vote Conservative as they sought change through the ballot box.
	The Secretary of State is right, however, to say that what has changed dramatically is the economic outlook. We have not compared notes, but I think that he will find that my speech takes the same shape as his, with remarks on the economy in Wales followed by remarks about the Welsh language order. Some 28,000 more people have lost their jobs, and we now have more than 100,000 people out of work. Many thousands of 16 to 24-year-olds are not in work, education or training, which is exceedingly worrying. A significant number of businesses both large and small have closed, and sadly house repossessions are rising. Although that is clearly not confined to Wales, or even to the United Kingdom, the effect on Wales, as the poorest region of the UK, is especially great.
	The first priority must be to help families and businesses in the short term. We would like taxes to be cut for savers and pensioners, a bold and straightforward national loan guarantee scheme to get credit flowing, a reduction in employment costs for small businesses, tax breaks for new jobs and a six-month delay in VAT bills to help small businesses with their cash flow. We believe that such practical measures could help our beleaguered economy.
	The Real help now list, which the Secretary of State produced with the Assembly Government, sets out various measures and schemes that the Government have established. Of course, the Secretary of State also referred to his summits. However, the documents and the meetings, although they are well intentioned and establish a plan, do not appear to save many jobs or halt business closures at the moment. Today, the Government are putting many more billions of pounds into our banking system, and that is hard news for businesses that are closing and those whose jobs are threatened in Wales.
	As has been said time and again, a credit crunch can be truly tackled only by addressing the problems of credit and getting money flowing to the business front, instead of the current sclerotic position, whereby nothing moves to help businesses. A bold loan guarantee scheme, such as that suggested by my right hon. Friend the Member for Witney (Mr. Cameron), would be welcomed throughout the country. While we tinker at the edge of the problems with so many of the schemes in Real help now, large sums go into the banking system, and the bankers appear to sit back in relative comfort, without apologising for their part in our economy's downfall.

David Davies: Will my hon. Friend recommend an early-day motion, which I tabled and many Labour Members have supported? It suggests that the directors of banks that have received large amounts of public money should publish their expenses in the same way as Members of Parliament, given that they now live off public money.

Cheryl Gillan: My hon. Friend is well known for his innovative early-day motions and other matters, but individual Members are responsible for appending their names to early-day motions. I would not presume to tell others what to do, but, if the mood takes them, I suggest that they look closely at that early-day motion because it probably has some merit.
	I would be interested to knowI am pleased that the Secretary of State said that he would get back to mehow many businesses the proposals have helped; how many extra jobs they have created in each of the past three months in which they have been operating; how many people have been diverted from the unemployment register into work; and how many jobs have been saved. I hope that hon. Members will forgive me if I am cynical, but I believe that, at this stage, few have been saved. Unless we quantify those items of help, we will not understand how we can start to bolster and improve our economy, save the jobs that we can and create a climate for future employment.

Peter Hain: The hon. Lady mentioned Conservative policy on banking. Has she read the letters page in today's  Financial Times? Tom Brown, senior credit executive at Norddeutsche Landesbank, finds it especially disconcerting that the shadow Chancellor is revealed as a man who does not have
	the haziest grasp on the cause of the crisis
	or how banks work. If the hon. Lady is taking advice from the shadow Chancellor, surely those comments are devastating.

Cheryl Gillan: The right hon. Gentleman obviously has more time on his hands than I have. What with preparing for the debate, for a television programme on which we will both appear later today and my private Member's Bill on autism, I have not had time to scan the papers. However, I am sure that the right hon. Gentleman remembers the remarks that some foreign politicians made about Labour Front Benchers, which I am too much of a lady to repeat.
	After prioritising help and removing the blocks on lending, I am sure that the Secretary of State agrees that we have a duty to look long term to ensure that Wales can emerge from the recession with the tools to flourish and prosper. To do that, we must make some major fundamental strategic plans rather than going for quick fixes or cheap headlines.
	Wales has fantastic natural assets and an enthusiastic and committed work force, as we all know. We must make the most of our assets and transform Wales into a country to which people can flock once again to do business and take their well-earned holidays. I want to consider some matters to which we need to give genuine attention to give Wales that competitive edge.

Lembit �pik: Will the hon. Lady give way?

Cheryl Gillan: I will, although I hope that the hon. Gentleman will make a contribution later. He usually intervenes and leaves.

Lembit �pik: I am grateful for the hon. Lady's generosity and I shall try not to storm out in a fit of pique.
	Does the hon. Lady agree that the fees that the receivers and administrators charge when a company closes are stupendous? They can be up to 760 an hour for an individual member of a company's work force. Does she agree that one of the problems that arise when a company shuts is that a significant proportion of the assets, which the staff would reasonably like to go towards their pensions and paying their debts, go to the receivers?

Cheryl Gillan: The hon. Gentleman does not need my endorsement of his opinion on accountants' fees for dealing with bankruptcies or receivershipshe has made the point himself. He will know, however, that there is an awful lot of such business, so those firms will be making good profits.
	I want to deal with those things that will give Wales a competitive edge when the country emerges from recession, as it will. As the Secretary of State knows, we should have such a debate between Westminster and Cardiff bay, because it is essential for the health and welfare of the Welsh economy that we co-operate at both ends of the legislative spectrum, as it were. We need to prepare Wales for the upturn.
	Let me deal first with transport. If Wales is to attract further investment, whether domestic or overseas, businesses must not feel isolated from other parts of Wales and the UK or from Europe or beyond. The journey from north to south Wales is still a great undertaking. The journey from Bangor to Cardiff by rail still takes more than four hours, which is almost an hour longer than it takes from Bangor to London. Although we should acknowledge the obvious geographical constraints, we must have long-term plans to increase accessibility to and from Wales and within Wales.
	With increased line speed, the rail freight network along the M4 corridor could carry more volume if more goods came in through Welsh ports. The ports deserve support. I am particularly concernedperhaps the Minister could deal with this when he winds upnot only by the Government's decision to recalculate, and thus effectively to raise, port taxes, but that this should be done retrospectively. That will place an added burden on a crucial part of the Welsh economy. Our road, rail, maritime and air links must all be maintained and enhanced to provide those valuable links to the worldwide market.
	As geography makes travel within Wales more arduous, it is vital that modern technology and infrastructure should help to compensate. Broadband coverage and speed need some attention, as I am sure the Secretary of State knows. At present we do not have 100 per cent. coverage, and the prominent not spots in mid-Wales effectively isolate those rural communities, in terms of modern business potential. The Government recently said that they wanted every home to have access to broadband at 2 megabytes a second at least by 2012. However, with average connection speeds of 2.9 megabytes a second in parts of Wales already and with technology being developed with much greater speeds in mind, we need to set our sights higher to give us the competitive edge. That will be crucial in Wales if we are to attract inward investment and stimulate business development in areas such as rural mid-Wales. I understand that the Secretary of State has responsibility for digital inclusion, so I hope that he will be able to give Wales the edge in speed and infrastructure that would help us to secure our future businesses and give us those first-class electronic links.
	Energy is another thing that we must consider. I welcome the Aberthaw announcement today. The strategy is critical in terms of both security and its impact on the local economy and the environment. The power station at Milford Haven is welcome. I have sung the praises of the liquefied natural gas pipeline linking Milford Haven on many occasions. That pipeline was delivered on time and on budget, and I am still so proud of it as a piece of British engineering, because it will contribute hugely to our energy security.

John Smith: Will the hon. Lady take this opportunity to endorse the view expressed by the Leader of the Opposition the week before last that we should have an open mind on the prospect of a Severn tidal barrage?

Cheryl Gillan: I will come to that in just a second. Before I do so, let me say that we need an energy strategy that reflects Wales's potential, that will include looking at the short list of options for the Severn barrage that have been announced. Any barrage, as we all know, will have positive and negative effects in respect of energy production and environmental impact. We need a rapid evaluation process, because there is no doubt about the potential. We have been talking about the barrage for an awfully long time without finding out exactly what should be done to capture renewables through the resources provided by the River Severn.

Roger Williams: The LNG pipeline might have been an engineering success but it has caused considerable environmental damage. Does she agree that when licences are awarded for large infrastructure projects, the environmental consequences should be much more at the forefront of the concerns of Government agencies?

Cheryl Gillan: No, I do not agree. I have flown along the pipeline and have met and talked to the chief engineer. I was exceedingly impressed by the amount of repair work and by the care that was taken with the environment. There were some absolutely stunning pieces of engineering in and around rivers and other areas of sensitivity. Some heavy negotiations had to be undertaken with a large number of landowners before the pipeline could extend across its chosen route. I think that the hon. Gentleman will acknowledge that anyone going anywhere near the pipeline cannot see it in many places. I therefore do not agree with the hon. Gentleman to that extent, but I have to say that no project should go ahead without an attempt to minimise its environmental impacts in every possible way. If Wales is to remain competitive, we must have a strategic energy policy.

Stephen Crabb: My hon. Friend responded very well to the point made by the hon. Member for Brecon and Radnorshire (Mr. Williams). She is exactly right that, yes, there was disruption when such a large and significant piece of engineering was put in place, but the quality of the reinstatement has been absolutely fantastic. I speak with experience, because the pipeline passes just beneath my back garden.

Cheryl Gillan: I am grateful for that intervention.

Adam Price: The pipeline also goes through my constituency, so I know that it has caused a scar across the length and breadth of Wales. There was a lack of democratic accountability for it, and some of the hon. Lady's English colleagues were instrumental in trying to oppose the plan. Is not the crucial point that although it may have improved energy security in the UK, most of the gas is not even available to customers in Wales? Should not energy decisions in Wales be made for the benefit of Wales, which was not the case with the LNG pipeline?

Cheryl Gillan: I am sorry but the hon. Gentleman reveals his isolationist credentials. I cannot agree with him at all. First, pipelines work both ways. Secondly, Wales is part of the United Kingdom, and if we pursue the hon. Gentleman's insular little Wales attitude in today's world, we will simply isolate the country from the rest of the world.

David Davies: I am grateful to my hon. Friend, who is making a very important point. Does she agree that if we followed the logic of the hon. Member for Carmarthen, East and Dinefwr (Adam Price), we would have no pipelines anywhere in the world to supply oil or gas across different nations?

Cheryl Gillan: I would have to differ from my hon. Friend in that I do not think that the hon. Gentleman was exhibiting any logiclogic of any worthwhile status anyway!
	The Secretary of State knows that I think we need to secure future nuclear generation at Wylfa. It is not only a vital element of the UK's energy production, but is of huge importance to the economy and jobs in north Wales. I shall be interested to hear what the Minister says about this debate in his concluding speech.
	Tourism is another element that we need to consider. In recent years, there has been a huge shift towards employment in tourism. It makes up 3.3 per cent. of the economic value added in Wales. The industry employs, directly or indirectly, nearly 80,000 people, and 1 in every 10 spent in the transport and retail sectors in Wales is spent by visitors. It is a key area, but our share of both UK and international tourism fell in 2007, which cost the Welsh economy an estimated 267 million.
	With environmental awareness and pressure on family budgets increasing, there is a clear opportunity for our Welsh tourist industry. This year is the 60th anniversary of the legislation that enabled the creation of our parks. Why travel abroad when our fantastic natural assetsour coastline, forests, lakes, mountains, terrific national parks and our warm welcomecould attract visitors who will be persuaded to return year after year, even as the financial situation improves? We really need to capitalise on those assets; we require a robust tourism marketing strategy to attract visitors now and maintain their numbers in future.

Albert Owen: I hope to catch Mr. Deputy Speaker's eye and speak on the Wylfa issue a little later, but on tourism, given the economic crisis and the weakness of the pound, is there not an opportunity to encourage people from European countries, particularly the Republic of Ireland, to come to Wales over Easter? The hon. Lady talks about a robust policy; should not Visit Wales capitalise on that, and show what good value for money the United Kingdom and Wales are at this time?

Cheryl Gillan: The hon. Gentleman and I could appear in a commercial for Wales on that front. We should be taking that message across Europe. What with the Ryder cup, the Olympics coming to the United Kingdom, and our rugby team, it is important that we sell Wales everywhere. We do not want the benefits to be felt only in and around the millennium stadium, the venues involved in the Ashes, or the golf course for the Ryder cup. We want the benefits to spread throughout Wales, but unless we have a comprehensive strategy, that will not happen. People will come to Wales, spend in a little, closed area, and then disappear again. We need a comprehensive strategy. A Welsh Tourism Alliance report last year recommended that liaison between the tourism industry and the Welsh Assembly Government be dramatically improved. It is only through co-ordinated action that we can ensure that adequate support is given to that vital industry at this vital time.

Daniel Kawczynski: My hon. Friend will know that the vast bulk of tourism to mid-Wales goes through Shrewsbury. On the A5-A49 roundabout, which is called Dobbies' island, huge delays are caused by caravans going to Wales on bank holidays and at peak times in the summer. I hope that when we are in government, before too long, she will work with me to ensure that there is investment in that roundabout to improve the flow of traffic to Wales.

Cheryl Gillan: My hon. Friend makes a good point on behalf of his constituency but I give him an assurance that, while I hold this post, whether in government or opposition, I will always work in the interests of Wales. That is at the forefront of my mind.
	To prepare for an economic recovery, we must address the matter of higher education in Wales. First, it seems incomprehensible that, at a time when thousands of people are retraining, or trying to prepare themselves to enter a difficult jobs market for the first time, there are plans to slash the further education budgets in Wales by 3 million. I ask the Under-Secretary to refer to the issue in his wind-up. Again, it is a devolved matter, but in view of the economic circumstances, I think that we in this House can show concern.
	As we all know, Welsh universities are some of the best in the world, and are an essential tool in building up Wales for the future. In recent years, however, the funding gap has become a great problemthere is a 61 million funding gap between English and Welsh universitiesand there is now significant pressure on facilities. As the universities try to compensate with increased numbers, there is the possibility as the student-teacher ratio becomes increasingly less favourable of diminishing educational standards. I am therefore concerned about the issue.
	Secondly, I am concerned about the portability of qualifications, an issue on which the Welsh Affairs Committee has just reported. It is absolutely vital that any qualifications gained in Wales, particularly vocational qualifications obtained in-house, are transferable and recognised outside Wales, as any failure in that regard will severely damage the prospects of attracting international businesses, which will want to recruit staff who can use their qualifications in other parts of the United Kingdom and internationally in Europe.
	Thirdly, we need to ensure that we have the necessary skills base in Wales to attract business, particularly in the light of the growth of the high-tech industries and the decline of the manufacturing sector. If we are to do that, it is essential for us to take account of the needs of industry by forging much closer links with business leaders in all sectors across Wales.
	In areas such as aerospace we are a world leader in our skill and technology base, but we cannot take those areas for granted. GE Healthcare is a world leader, but we have lost invaluable skilled jobs from its factory in Wales. We need to ensure that we create the right conditions for key industries to thrive. I want to see evidence of clear strategies to attract and maintain the businesses of the future: scientific and industrial strategies, almost like the old foresight strategy of a few years ago, which the Minister may remember. That includes securing the delivery of the St. Athan project, which has been along a very bumpy road.

John Smith: rose

Cheryl Gillan: If the hon. Gentleman will forgive me, I should like to make a little progress. I am sure that he will make his own speech, and will press the case for a project that he has championed relentlessly. I should like to hear from the Minister what progress is being made on it.
	While preparing people and the business environment for the recovery, we must also ensure that we do not erect barrierstariff or non-tariffto new ventures.
	It is essential that we examine the recently published Welsh language legislative competence order, to which the Secretary of State referred, and which is a matter of concern to some businesses in Wales. Conservatives have a proud record on the Welsh language, and are committed to its growth. Every piece of legislation that has strengthened the language has been Conservative-led, including Lord Roberts's excellent Welsh Language Act 1993. Many businesses are already making enormous strides to provide information in Welsh, and we must encourage those efforts through a culture of shared responsibility rather than heavy-handed bureaucracy. We must ensure that the devil is not in the detail of the LCO, which should be examined closely both across the House and, as the Secretary of State reaffirmed, more widely.
	Some may question our callI think it is a joint callfor closer scrutiny of the order, but we must ensure that there are no unnecessary burdens on business, and that the good will towards the language is maintained at this time of enormous economic difficulty. We must put the interests of the people and businesses in Walesespecially in these tough economic timesat the heart of any decisions on linguistic policy.
	I am also concerned about the way in which the LCO will be scrutinised. I hope that the Secretary of State will devote some of his time to examining the way in which the scrutiny process will develop. There is some concern about the possibility that the House and the Welsh Affairs Committee will start to scrutinise the order while recommendations for change are being made in the Assembly. I hope to have a meeting with the Secretary of State to discuss whether, instead of conducting our investigations in parallel, we could conduct them sequentially, so that we can be sure that the document being examined by the Select Committee here is the one recommended by the Welsh Assembly Government.
	Transport, education, energy, electronic communications, tourism and, perhaps most of all, not creating unnecessary barriers or burdens for business should help to position Wales for the upturn. We share a common aim in wanting to help families and businesses in Wales to come through the current financial difficulties. I hope that the Secretary of State will work closely with the Welsh Assembly Government and with his colleagues to ensure that Wales is in the best possible position to take advantage of the upturn when it comes. We need forward thinking and strategic planning. I think that by looking at our longer-term goals as well as dealing with our short-term problems we can ensure that Wales comes through these difficult times with the means to succeed in the future.
	I want to end on a positive note for St. David's day. I think we in Wales will have our we can do moment: I believe that our businesses and people can work hard, and that we can create the right climate for inward investmentand I look forward to having the opportunity, on another occasion, of being able to read out all the job gains and inward investment coming into Wales, rather than having to spend time concentrating on the job losses and the businesses that have gone.

Several hon. Members: rose

Mr. Deputy Speaker: Order. Before I call the next Member to speak, may I remind the House that Mr. Speaker has placed a 12-minute limit on Back-Bench speeches, and that that starts now?

Hywel Francis: I wish to make a contribution to this debate from two perspectives: that of an individual Memberfor Aberavonand that of Chair of the Welsh Affairs Committee. The perspectives and priorities are much the samethey follow those outlined by my right hon. Friend the Secretary of State for Walesand they are clearly about the economy, both local and global; nothing is more important to the people of Wales.
	In my constituency, manufacturingin particular, steelis the dominant sector. In my roles as a member of the all-party steel and cast metal group, and secretary of the steel union community parliamentary group, I have had regular meetings with Ministers, unions and Corus, as well as my local authority. I have been impressed by the fact that there is a universal desire to retain both the steel industry and, equally importantly, the skills within that industry. I particularly congratulate the Welsh Assembly Government and the Secretary of State for Wales on the work that they have done through the Welsh economic summits, and, more widely, the steps that they have taken to establish the ProAct and ReAct initiatives. I am also looking forward to the local economic summit that will be launched in Neath-Port Talbot very soon, and I know that similar initiatives are taking place across Wales, which is most welcome; my hon. Friend the Member for Ynys Mn (Albert Owen) is taking a leading role in his local economic summit.
	In the course of evaluating the impact of the economic downturn on my constituency, I have visited several small businesses. I recently met the management and work force at two important small companies: Excel and Rhino Engineering. They are both cutting-edge manufacturing companies which are appreciative of the information and guidance being provided by the Government, and particularly the circular letter that the Secretary of State for Wales recently sent to Members, copies of which have been passed on to many businesses in my constituency. The two companies have also benefited from significant contracts for the 2012 Olympics and Paralympics to be held in London.
	Looking cautiously to the future, I have been struck by Tata's continued expressions of support for local communities in my constituency and the backing that it has given to the Corus steel plant, as well as by the fact that it is seriously examining the possibility of developing the new Margam drift minea project that, as one would expect, has strong support from the National Union of Mineworkers and other local unions.
	Again looking to the future, it is encouraging to see that employers' organisations such a the EEF and UK Steel and unions such as Community are looking beyond the current difficult circumstances, talking up the need for greening the economy, what they call a nuclear renaissance and its links to steel, and ultra-low carbon steel-making, turning theory into what they call practical reality.
	Turning to the work of the Welsh Affairs Committee, which I have the privilege of chairing, I should at the outset pay tribute to all its members and staff for their sterling work over the past year. Its work load has virtually doubled in the recent period, and I am pleased to announce today that over the past year we have succeeded in getting significant improvement in staff support to take account of this increased work load.
	Our annual report, which will be published tomorrow, outlines the growth and range of our activities. The Committee's profile has also been raised both here in Westminster and in Wales, and on balance, we should welcome that. One kindly journalist compared my Committee to that benign institution the Commonwealth games. One Assembly Member generously suggested that we should serve on only one Select, or any, Committeeon just our own Committeea suggestion that I found helpful.
	One hon. Member, a great supporter of our Committee and one-time member of itthe hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), to whom I sent a message earlier today; I understand that he is on his way to Cardiffgave some advice on how I should run my Committee. He suggested that I should crack the whip. I am grateful for his advice, but that is not my style and I do not think it the style of any Chairman of a Select Committee. We work by consensus and consenta more inclusive approach. Ours is not the style or the language of the slave-driver.

Albert Owen: Was my hon. Friend as disappointed as I was, as a member of that Committee, to read those comments from the leader of Plaid Cymru in a national newspaper? If somebody has suggestions or ideas for a Select Committee, writing to the Chairman is the normal convention.

Hywel Francis: I am sure that the hon. Gentleman will read the account of what my hon. Friend has just said. We have had an interesting discussion about the matter, and I reported that to my Committee.
	Although in some quarters we may be approaching the notoriety of the committee of public safety in revolutionary France, I am more of a Gramsci than a Robespierre, although I think that Robespierre had his merits.
	The work of the Committee in the past year has focused, as it will in the coming period, directly or indirectly on the economy in recognising the need for an outward-looking, global Wales, rather than a fortress Wales.

Julie Morgan: My hon. Friend says that his Committee has generally been concentrating on the economy. May I say how pleased I am that he is undertaking an investigation into the Legal Services Commission's plan to cut jobs in Wales, which will of course affect the economy because of the number of jobs that would be lost?

Hywel Francis: I thank my hon. Friend for that intervention and congratulate her on the sterling work that she has undertaken on this matter.
	As my right hon. Friend the Secretary of State mentioned, we have undertaken a globalisation inquiry and a cross-border inquiry. Both these reports highlight heavily the importance for the long-term economic future of Wales of the need to establish higher-level skills, as the hon. Member for Chesham and Amersham (Mrs. Gillan) rightly said. In our globalisation report, we recognise the central importance of universities and colleges in building the knowledge economy, and the need for that to be done at local, national and international levels. We were particularly impressed with the role that universities are already playing in this field in Wales by contributing to their local economies. Much could be learned in some respects from more advanced developments, such as the Mondragon co-operative university, in the Basque country; Xiamen university, which I am delighted is twinned with Cardiff university; and other, similar initiatives.
	In our recently published report on cross-border public services in relation to further and higher education, we highlighted the vital issues, which have already been mentioned, of the funding gap, the research profile and UK science policy.

Daniel Kawczynski: I am grateful that the hon. Gentleman is talking about the cross-border issue. He probably knows that the Royal Shrewsbury hospital loses 2 million a year as a result of the different tariffs that it is paid by the Welsh Assembly. I hope that his Committee has looked at how English hospitals are losing out.

Hywel Francis: We have made some observations on that matter. We have not done anything about roundabouts in Shrewsbury, but I am sure that we will come to that issue as well.
	The message of the two reports was very clear. With all due respect to the importance of widening accessI spent a quarter of a century in universities trying to achieve thatthe whole question of student finance pales into insignificance when we are dealing with the core question of the funding of universities for proper teaching and research. Unless that question is addressed, we will not be able to build the knowledge economy of the future and thus safeguard quality jobs for all our communities.
	We made several key recommendations, especially on science policy and research, which can be influenced by the Welsh-UK Government partnership. I hope that we will be able to emphasise that in the future. I am delighted that my right hon. Friend the Secretary of State for Innovation, Universities and Skills has recently visited Cardiff university, and he has agreed to come to my constituency in the autumn to visit Glamorgan university's hydrogen centre and Swansea university's Technium centre and the new science campus, which will be based largely in my constituency.
	On the theme of the knowledge economy and creating new, sustainable jobs for the future, my Committee has begun its inquiry on digital inclusion, and we will visit Bangor university to see how higher education is addressing the social and economic challenges facing us. We may also need to consider seriously the role of broadcasting within that inquiry, given the impact of digitisation on the Welsh economy and the democratic deficit. Lord Carter's interim report, Digital Britain, which was published in January, is a matter of concern for us all, not least because as a reserved matter broadcasting is a concern for my Committee.
	Finally, I shall turn to my Committee's new responsibility to undertake pre-legislative scrutiny of LCOs emanating from the Welsh Assembly Government. After 18 months of hard work and much learning by everyone, we have established a pattern of work that is now functioning reasonably well. We have excellent working relationships with Welsh Assembly Government Ministers, Assembly Committees and the Wales OfficeI see a wry smile on the faces of the two Ministers on the Front Bench.
	We are about to undertake work on two important LCOs, and I am somewhat dismayed that so far no mention has been made of an important LCO on carers. It is to the credit of the Welsh Assembly Government and the Assembly Member for Llanelli, Helen Mary Jones, who initiated this particular LCO, that this is coming before us. We should recognise and respect the right of the Welsh Assembly Government to prioritise its policies and propose legislation. This particular LCOI declare an interest as a vice-president of Carers UK and the sponsor of the Carers (Equal Opportunities) Act 2004will affect nearly 1 million people in Wales, so it is a matter of some consequence.
	I have said publicly, and will repeat, that we will undertake our work thoroughly and, in the words of Erskine May, in an expeditious manner and in partnership with our colleagues in the Assembly. I have already had meetings with Dr. Dai Lloyd, the Assembly Member whose committee deals with the carers' LCO, and with Mr. Mark Isherwood, the Assembly Member whose committee deals with the Welsh language LCO. At 5 o'clock this afternoon, I will have a meeting with the Culture Minister, Mr. Alun Ffred Jones, and in a few weeks I shall meet Meri Hughes, the chair of the Welsh Language Board. I am delighted to announce that, on the same day, she will also be prepared to meet all Welsh MPs here in the House.
	As an indication

Mr. Deputy Speaker: Order. The hon. Gentleman has had his due time.

Mark Williams: Thank you, Mr. Deputy Speaker. May I begin by associating Liberal Democrat Members with the profound comments that we heard from the Secretary of State and the shadow Secretary of State on the loss of Ivan Cameron? All of us, and especially those of us who are parents, will appreciate that there is nothing more sorrowful than the loss of a child in such sad circumstances. Our condolences go to the Leader of the Opposition and his family.
	It is a privilege to follow the hon. Member for Aberavon (Dr. Francis). I say this as an opposition MP, but he is an excellent Chairman of our Select Committee and his pursuit of a consensual style is to be admired. I shall add to what he and the Secretary of State have said about the ingredients for the future and especially the importance of higher education and the skills agenda. We need to develop the Welsh skills base, so that businesses both large and small are supported. In particular, I shall speak from a rural perspective about small businesses.
	As we have heard, the report on the cross-border provision of higher education identified some of the positive steps that have been taken. However, it also alerted us to some of the great issues of concern, the clearest and starkest of which is the funding gap of some 61 million. The House does not need to be reminded that Wales has some of the finest academic institutions in the world, but if the present level of funding is not maintained or increased, there is a great danger that we will fall behind in an increasingly challenging global market. That would make it more difficult for Welsh institutions to compete for research funding which, considering our relative size, is already disproportionately low. A lack of research funding will inevitably make it more challenging for Welsh universities to keep top academics, and the knock-on effect will be that it will be harder to attract new students.
	Moreover, we have to compete internationally as well as in the UK context. The Committee took evidence from Professor Merfyn Jones of Bangor university, who pointed out that international students contribute well over 100 million annually to the Welsh economy through the payment of fees and through spending their money locally. Concerns have been raised with me, most recently by the vice-chancellor of Aberystwyth university, about the mismatch between the length of visas and the duration of some of the courses that overseas students wish to undertake.
	I do not mean to patronise the Welsh Assembly Government in any way, but our report found that, in developing the work force development fund, they could learn some lessons from Train to Gain. It was felt that Train to Gain was far better at promoting itself than the work force development fund. We took evidence from Summit Skills, the sector skills council for the building services and engineering sector, and were told that many employers simply did not know that the work force development plan existedthe Welsh Assembly Government had not advertised it at all.
	The Leitch review has demonstrated the importance to the future skills base of reskilling and upskilling. Learning is a lifelong process now, and not something that happens only between the ages of four and 16. In that context, I know that the Welsh Assembly Government will assertI mean no criticism, as we have heard the same assertions from the Secretary of Statethat 68 million has been spent on the ReAct and ProAct schemes. That is welcome but, like the hon. Member for Chesham and Amersham (Mrs. Gillan), I find it hard to reconcile that with the 7 per cent. cuts that have been made in further education in Wales. As one of my colleagues in the National Assembly, Jenny Randerson, remarked, we should no doubt praise the admirable further education college in the north-east that is now in receipt of 60 million a year, as that is more than the Assembly budget for further education across the entirety of Wales.
	The skills agenda was rightly highlighted when we found ourselves in somewhat uncertain economic climes, but it is now all the more important that we focus and refocus on it. We considered that in our report on globalisation. When the representatives of Higher Education Wales gave evidence to the Select Committee, they stated that higher education contributed 1.6 billion to the Welsh economy, which demonstrates just how important it is. As others have said, we are now moving on from developing the interface between traditional academia in our universities and opportunities in the commercial world. Examples of that are the relationship between Aberystwyth university and Bangor university, the growing associations between the other higher education institutions in Wales, and the merger of the Institute of Grassland and Environmental Research and Aberystwyth university to form the Institute of Biological, Environmental and Rural Sciences. The Under-Secretary of State was there last week and heard about the development of biofuels, the academic scientific research into that development and the need and enthusiasm at IBERS to develop commercial partnerships to take these projects further.
	Of course, that is all underpinned by the state of the national economy. My party certainly supported the recapitalisation of the banks last October. We share across the House the concern that, since October, 5 billion less has been lent to enterprises across the country. My hon. Friend the Member for Twickenham (Dr. Cable) has made our approach quite clear: we favour the acquisition of ordinary shares so that the Government can have a steer on lending and remuneration. The offensive news that we have heard last night about the 650,000 pension awarded to Fred the Shred, as I think he is called[Hon. Members: Outrageous!] It is outrageous. It does not resonate strongly with what we have heard about the roles of the banks in relation to small businesses and with the difficulties that rural businesses have experienced.
	In my constituency, small businesses account for two thirds of the work force. Indeed, 54.2 per cent. of people in Ceredigion are employed by micro-businessesbusinesses with nine employees or fewer. That is the highest percentage in Wales. When we consider rural businesses, we must make the point that the collapse of small and micro-businesses has a direct effect on the broader rural economy. When young families are forced to move away, that has an effect on the pupil numbers in the village schools and on the ability of public services to continue. That can make the difference to a community's survival.
	I remain very concerned, as we all do, I am sure, about the attitude of the banks. Let me use an illustration that I have been aware of for the past couple of weeks. Two constituents of mineI will not mention their businesscame to Finance Wales in good faith two or three years ago, and achieved funding for their enterprise. Difficulties followed, the cost of bank loans has risen and they are now in talks with one of our high street banks to renegotiate the loan. The banks displayed stridency and determination in not budging from a repayment figure of 233 a month, whereas my constituents could raise only 200. That 33 is the difference between the threat of bailiffs hanging over them and their future viability as a business, which would be assured if the bailiffs went away.
	One constituent of mine in the north of Ceredigion has the misfortune of having a range of empty business premises. Although the rate relief has been welcomewe heard about that earlierfor small business people with empty business premises, my constituent will not be helped by the scheme and faces an annual rates bill on empty properties of some 30,000, which directly affects his capacity to function in other areas. That is the reality of the operation of the banks on the ground.
	I have read the Wales Office website in some detail, and have read about some of the schemes available. It states some of the criteria and whether they are applicable to England, Wales or the UK, and gives telephone number contact details. However, there is still a problem in getting that message through to some of our small business people. Two weeks ago, I went to a small business breakfast in Aberystwyth armed with the website page and went through it with those people. Much of it was fresh news to them, so I do not think the message is getting through to those businesses about the extent of the available help, which they desperately need.

Daniel Kawczynski: Does the hon. Gentleman agree that it is vital for local authorities to do more to give contracts to local firms? I am encouraging Shropshire county council to increase the amount of business it gives to local Shrewsbury firms and I am sure the hon. Gentleman is doing the same in his area.

Mark Williams: I thank the hon. Gentleman for that intervention. That action is certainly being taken by my local authority and by Cardiff. The Assembly Government summits have looked at procurement, which is important.
	The closure of the tax office in Aberystwyth has been frustrating in the extreme, not least given the economic climate in which we are operating. It is frustrating given that on the basis of a saving of 83,000, the Aberystwyth tax office is to go, despite the fact that Her Majesty's Revenue and Customs spent 50 million on consultants last year. The Financial Secretary asserted to me that the closure
	will not have an adverse effect on the services to small businesses.
	My goodness, if ever there was a need for services to small businesses, it is now. He said:
	Most of HMRC's businesses can operate without the need for a local presence.
	I know that is the experience of other Members across mid and west Wales. The Financial Secretary asserted that
	the Department's customers are increasingly using the internet as a preferred way of doing business and obtaining information. Where face to face services are provided these will be maintained at a level geared to meet local demand.
	According to the soon to be former HMRC employees in my constituency, that means pointing clients to a telephone linked to a call centre elsewhere.

Roger Williams: My hon. Friend is right to emphasise the loss of tax office services to small businesses. In these difficult economic conditions, a number of my constituents find themselves subject to tax inspections. They do not have the time for such inspectionsthey want to run their businesses. Surely, this is the time to lay off such things and allow businesses to ensure that they are still around when the upturn comes?

Mark Williams: I take my hon. Friend's point, but the sad reality for inspections across mid-Wales and the extremities of Powysso I am told by HMRCis that the spectre will arise of a roving squad of two people serving the needs of Montgomeryshire, Brecon and Radnor and Ceredigion. Only two people will respond to the problems that arise.

Lembit �pik: My hon. Friend is a feisty campaigner in defence of rural HMRC offices. Does he agree that one of the factors excluded from the closure calculations is the potential reduction in the tax take? The more remote the offices in any practical sense, the less connected some people will feel to their responsibility to pay tax. The closures could actually cost more than they save.

Mark Williams: I certainly agree and I thank my hon. Friend for that contribution. We are still trying to get the elusive figures in that regard.

Stephen Crabb: Is not the irony that in recent years HMRC has deliberately devoted more resources to targeting big business customers of its services and has de-prioritised small businesses? Large banks are not making any money, and HMRC needs to raise money efficiently from the small business sector, so the plan to decimate the network of tax offices in rural west, north and mid-Wales is counter-productive.

Mark Williams: I thank the hon. Gentleman for that intervention and pay tribute to his work trying to defend the office in Haverfordwest. He makes a valid point. I am amazed at the lack of thought behind the closures, not least in the present climate. All our calls for a moratorium on the closures have been ignored by the Government.
	The hon. Member for Chesham and Amersham (Mrs. Gillan) mentioned broadband. Of course, the answer to HMRC's problem is now broadband, but she mentioned the problems of not spots. Again, I pay tribute to the National Assembly for its work. There are six pilot schemes across Wales, one of which is Cilcennin in my constituency, which will now get some assistance after a long campaign for broadband, but we have a long way to go. All that, in my consituents' context, is taking place in an area that is deemed to need convergence funding for good reason: it is an area of significant social and economic deprivation, as recognised by the National Assembly's communities first programme.
	Let me touch on another rural businessthe family farmand the anxiety that is being expressed, certainly among the farmers in my constituency, about the introduction of the compulsory electronic identification of sheep. Again, I will pay tribute where tribute is due: the Government have had some success in delaying the introduction of that scheme. None the less, EID is looming fast, and there is real anxiety in the countryside. It has been estimatedit is a low estimatethat 18 per cent. of farm income will be lost to the introduction of EID. I remind the House that farm incomes stood at 3,000 in less favoured areasindeed, in most of Walesin 2006-07. That was 63 per cent. down on the previous year, while income on lowland farms was down by 24 per cent. at 8,500.
	I am sure that other colleagues have written to the European Commissioner who is responsible for EID. I was extremely disappointed by her response, which seems to go along the lines not of justifying the system, but of saying that we must proceed just because some countries have started their introduction of the scheme, despite the proven facts that, geographically and climatically, the problems that we have in Wales make the system completely inappropriate. It seems extraordinary that the Commission is not prepared to alter the policy. It may have looked good on paper and ticked various boxes in Brussels, but it has been shown to face significant problems on the ground that will, at best, render it useless and, at worst, seriously undermine the continued viability of small family farms.
	The Government have lobbied on the issue. I pay tribute to Elin Joneswe share a constituencyfor working hard on the issue in the National Assembly, but I urge the Government to continue to push for a derogation and a non-compulsory model. I initiated a Westminster Hall debate on the subject, when there was remarkable unanimity between representatives of my party and other hon. Members. The hon. Members for Ynys Mn (Albert Owen), for Preseli Pembrokeshire (Mr. Crabb), for Meirionnydd Nant Conwy (Mr. Llwyd) and for Clwyd, West (Mr. Jones) were all there. We all argued the same way and sang very much the same tune, yet the scheme is proceeding.
	Of course, the background for todaythe sad realityis the continued funding crisis, whether from banks to small businesses or family farms, or now because of the spectre of a 500 million cut in the National Assembly's budget, made worse by the Barnett formula in all its manifestations. I reflect again on my constituency and I look at the tight local government funding settlement in a county where 40 per cent. of the work force are employed in the public sector. Some people have asserted that those public sector jobs would buffer us from the challenges of the recession, but as I look at NHS schemes, I am less certain that they will proceed. As we mark St. David's day, I look even at a great, iconic institution, the National Library of Wales, which has had a marvellous success with the open-doors policy that has attracted tourists and academics alike to Aberystwyth and the county of Ceredigion. Because of cuts in its funding, the doors of that august institution will be locked on Saturdays. The Minister has visited the National Library of Wales and has seen some of the excellent work that is being undertaken there, and he will be aware of that dispute.
	HMRC could now alter its interpretation of the rules for claiming back VAT, which will cost the National Assembly 500,000. The hon. Member for Carmarthen, East and Dinefwr (Adam Price) has been involved in that issue as well. Cuts in our budget are in prospect, and that will, no doubt, have implications for service delivery.
	Members may be pleased to hear that I am now turning to my final point; they can rest assured that my hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) will be back on the Front Bench, rather than being a boisterous Back Bencher. On what is nearly its 10th anniversary, I should like to say a little about devolution.
	After nearly 10 years of the Assembly, this debate is as good a time as any to be positive about the contribution made by devolutionalthough I hesitate as I look towards the hon. Member for Preseli Pembrokeshire. Some of us have been frustrated by the operation of the Government of Wales Act 1998. The hon. Member for Caernarfon (Hywel Williams), who is not here this afternoon, talked about the 27 hoops and hurdles that have to be gone through and jumped over before measures can see the light of day in Cardiff. However, legislative competence orders represent progress. Some of us devolutionists passionately believe that anything that can lead to the legitimate transfer of power from this place back to Cardiff should be welcomed. I look forward to the referendum, when the time is right, and I for one am glad that Sir Emyr Jones Parry will not be heading off to Bosnia but concentrating on the work at hand back in Wales. We wait to see what the all-Wales convention will produce when it reports at the end of this year.
	While we have the system, we need to make it work. We have talked about the Welsh language legislative competence order. There are those here who stridently oppose the orderalthough, since the hon. Member for Monmouth (David T.C. Davies) left his place, there have not been as many as there were. I agree with what Front Benchers said about the need for the widest debate, and we have moved on from any assertion that this place should have a monopoly on the debate through the Select Committee. Of course we need the widest discussion, but my party cannot accept that it is not the place of Assembly Members to make the ultimate decision on the mechanics of the measure that they wish to put before us. We are clear on that. The role of the Select Committee is clear. There is a debate to be had about the effects of the LCO on small businesses, and there will be comment from this place. However, the ultimate legitimacy rests elsewhere and the ultimate decision should be made in Cardiff.

Peter Hain: I apologise to the House, as I will have to leave almost straight after I sit down; I have to go to Cardiff to join battle with the shadow Welsh Secretary on Question Time tonight. I am sorry that I will not be here for the winding-up speeches.
	I was grateful that my right hon. Friend the Secretary of State responded positively to my request that he look into the South Wales police funding crisis. I suggest, however, that the problem lies more at the Welsh than the Westminster end in respect of the meeting that he might be attending. I hope that those who made the decision will reverse it in Wales.
	Another policy area for which decision making remains at Westminster is broadcasting. The House should give proper attention to the impact on audiences in Wales of the decisions on the future of public service broadcasting that Ministers must take in the coming months. There is room for considerable concern, and I am grateful that, as my hon. Friend the Member for Aberavon (Dr. Francis) reported, the Welsh Affairs Committee will look into the matter.
	ITV said publicly that the cost of its public service obligations will exceed the benefits of being a public service broadcaster earlier in Wales than in Scotland or Northern Irelandin other words, the situation is more serious in Wales. In January this year, ITV Wales reduced its news output to four hours a week, and its general programming for Wales to a mere 90 minutes a week. Only a few years ago, its general programming amounted to nearly seven hours a week. There is no certainty that even that 90 minutesthat hour and a halfwill last more than a year or two; we could go from seven hours a week to nothing in a few years.
	I also understand that BBC Wales is having to find savings of 3 million a year for the next five years. That is bound to restrict the ambition and range of what it makes for Welsh viewers and includes, of course, the ending of BBC2W. Taken together, this represents a shocking reduction in service for Welsh viewers. The Assembly's broadcasting advisory group calculates that between 2006 and 2013 the annual value of English language programmes made for Wales will have reduced by more than 20 million. There is a great danger that this will become permanent. That prospect raises economic and cultural issues for us in Wales, as well as questions about the role of television in our democracy.
	There are some welcome conclusions in Ofcom's final report on its public service broadcasting review, as there are in Lord Carter's interim report, Digital Britain. I particularly welcome the support for the continuation of S4C, the recognition that we must retain a strong and viable competitor for the BBC in Welsh news, and Lord Carter's suggestion that we should plan for a digital universal service commitment by 2012. I know that my right hon. Friend the Secretary of State, who also has a brief for digital inclusion, is considering that issue. However, neither Ofcom nor Lord Carter seems to have given sufficient weight to the issue of general programming made for audiences in the nations. Indeed, Lord Carter's report does not address the issue at all, concentrating solely on the provision of news and production quotas for the UK networks. Ofcom recounts the proposals made by various bodies in the nations, including the Welsh Assembly Government and its broadcasting advisory group, but makes no firm recommendation.
	Since 1982, an honourable provision has been made for the Welsh-speaking audience through S4C, which has provided a wide range of programmes, and successive Governments have given this greater care and attention. We must now show equal care and attention for programme services for the majority non-Welsh-speaking audience in Wales. Most Welsh viewersindeed, 80 per cent.speak English rather than Welsh.
	Unless something is done, the BBC could soon be the only provider of general programmes in English for Wales; and even that is on a downward curve. Assuming the survival of Welsh news on ITV, in future English language programmes made specifically for the audience in Wales will be totally dominated by news and sport, leaving only 10 per cent. of the output for drama, music, arts, factual, and light entertainment programmes. By comparison, S4C's service devotes about 40 per cent. of its output to news, current affairs and sport, and 60 per cent.10 times the amount of English language provision on the BBC and elsewhereto other programmes. It is important that we share the view conveyed to Ofcom by the Welsh Assembly Government that
	this is not a defensible proposition for a developed national community that brings to the table the sort of cultural legacy that Wales commands.
	One of the successes of devolution is that it has given a greater focus to cultural policy. The fact that our actors and singers, poets and artists are getting unprecedented attention is of huge value to Wales as a whole. We have all cheered at the success of Dr. Who and Torchwood, Michael Sheen and, of course, Duffy, who received those marvellous Brit awards last week. In television, we must not allow the soil in which many of these creative talents are grown to be carted away and dumped. Coronation Street is important to us all, but especially to the people of the north of England; the same can be said of EastEnders for the people of London. They are both a permanent presence in people's lives. Yet I gather that last year there were only four hours of television drama in English made specifically for the audience in Wales by BBC Walesincluding, of course, the excellent Coal House. Drama has long disappeared entirely from ITV Wales's service. The same sad picture could be painted in comedy and light entertainment.
	As regards funding, there are optionsI hope that my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary will look into thisthat might solve the problem without further impinging on the public purse: for example, use of the proceeds from the sale of spectrum following the switch-off of analogue transmission, or use of the part of the licence fee that is dedicated to the digital switchover campaign, which will end in Wales at the end of this year.
	The audience in Wales deserves better than this very sharp decline in general English-language programming provision, and I hope that whatever decisions are made in the current months, the restoration and development of a fully adequate English language programme service for Wales will get a high priority. I fully support the move towards the development of high-speed broadband services, but the fact is that traditional television will be a major factor in people's lives for some years to come, and probably for ever in many respects. People in Wales deserve a full reflection of their lives on television in English as well as in Welsh.

Stephen Crabb: It is a pleasure to participate once again in the annual, not-quite-St. David's day debate on Welsh affairs, and it is a privilege to follow the former Secretary of State for Wales, the right hon. Member for Neath (Mr. Hain), who was economical with the time allocated, and made an extremely important point about the importance of home-grown, Welsh-produced television for an English language audience in Wales.
	The backdrop to the debate is, as right hon. and hon. Members have already said, the deteriorating economic picture facing Wales, the UK and the entire world. I was still a member of the Select Committee on Welsh Affairs when it began scoping out its inquiry into the globalisation report, which is one of the background documents to the debate. The economic scenario that we were considering two years ago seems very different to the one we are facing now. Looking back, it is interesting to note that what many of us regarded then as underlying strengths of the economy now look illusory, built as they were on piles of unsafe, risky debt.
	The report also highlights the fact that what hon. Members from all parties recognise as underlying continuing weaknesses in the Welsh economy now look even more troubling and disturbing. I am thinking of the growing pool of people not in education, employment or training, the persistent problem of worklessness and a rate of people claiming incapacity benefit in Wales that is higher than the national average. Some deep-seated economic issues have to be tackled, and the current economic downturn makes that more difficult.
	It was interesting and useful to hear the Secretary of State outline all the measures that the Government and the Welsh Assembly Government are taking to assist Welsh businesses, but I reiterate the point that I made earlier. The data that we are seeing from Wales so far do not suggest that the Welsh economy is any more resilient to the downturn than other parts of the UK. I am thinking, for example, of the recent RBS purchasing managers index report, which is a monthly monitor of the state of business activity in Wales. The most recent report shows the eighth consecutive month of a significant contraction of private sector business activity in Wales, which is very concerning.
	At the end of January, the First Minister of Wales, Rhodri Morgan, said that he had no idea when the recession would end. That is probably a more realistic assessment than the one underpinning the pre-Budget report in December, which forecast the UK effectively bouncing out of recession six months from now. No one would regard that as a realistic economic forecast now. The truth is that we do not know when the recession will end, and it could be a long haul indeed for the Welsh economy and Welsh businesses. We all hope that better times lie ahead, however, and fundamental to that, and to reorienting and rebalancing the Welsh and UK economy, is focusing as never before on world-class skills and education. That issue has been flagged up already, and it was good to see that skills featured strongly in the Welsh Affairs Committee's report on globalisation.
	In the time that I have, I would like to make a few brief points, the first of which concerns further education. That was already highlighted by the powerful speech of the hon. Member for Ceredigion (Mark Williams), who spoke about some of the pressures facing the further education sector in Wales. The umbrella body for further education colleges in Wales, fforwm, predicts that about 450 jobs will have to be lost from further education colleges in Wales in the next 12 months as a result of the cut of about 3 million that is being made to further education this year. At a time when we need to focus even harder on the skills agenda to help the Welsh work force adjust to the challenges of the recession, the further education budget is actually being cut. My local college, Pembrokeshire college, is consistently the most successful beacon award winner in the UK, having notched up seven beacon awards in the past six years as recognition of its innovative and effective approaches to further education. In the next 12 months, there will be a 1 per cent. reduction in its budget at a time when it should be expanding the courses that it offers and the skills training that it delivers to the people of west Wales. That picture in my constituency is replicated right across Wales, with further education colleges having to make cuts at a time when they should be thinking about how they can expand services to help their local areas.
	Another issue flagged up in the report on globalisation was the importance of Welsh exports. There has been something of a success story in recent years. In his evidence to the Committee, a Trade Minister said that the Welsh economy had been a particular beneficiary of globalisation, with the value of Welsh exports growing by half between 1998 and 2005, almost twice the rate of the UK as a whole. He cited specialised electronics, technology, aerospace and the service sector as areas in which Wales had a comparative advantage relative to other parts of the UK.
	We celebrate the growth in exports from Wales, but if we dig a bit deeper into the figures and drill down into what is driving that growth, the picture does not look quite so rosy. According to the most recently released statistics, in the previous 12 months the value of Welsh exports had grown by 1.3 billion on the year before, up from 9 billion to almost 10.5 billion. That looks great on the surface, but when we drill down into those figures we see that that growth in value was driven to a significant extent by inflation of the oil price, as Wales is a significant exporter of refined petroleum products from the two major refineries in west Wales. When we strip out the effect of $150 barrels of oil and the increase in the price of refined products, we see that there are challenges to be addressed in increasing export volumes from various industrial sectors in Wales. Perhaps the picture is not quite as positive as we are led to believe.
	The Committee noted in its report that it was disappointed by the achievements so far of International Business Wales, the arm of the Welsh Assembly Government that is seeking to boost trade, particularly with China, secure inward investment and expand exports. Much more work needs to be done at UK and Welsh level on considering how to encourage Welsh businesses to take advantage of parts of the world that are still experiencing economic growth, such as India, China and south-east Asia. That is a major challenge.
	A point that was not highlighted in the Committee's report, but that is relevant to the discussion of the economy and globalisation, is foreign language skills. There has been a disastrous decline in the number of Welsh young people coming out of school with any meaningful qualification in a modern foreign language. Back in 2002, the Assembly Education Minister, Jane Davidson, said at the launch of the Assembly Government's national modern foreign languages strategy:
	Learning a language can empower individuals, promote cultural understanding and diversity and above all enable us to remain competitive in a global marketplace... can we honestly expect to become really effective traders or world citizens if we always simply expect others to accommodate our limitations? The answer must surely be no.
	That is great rhetoric, with Assembly Members talking up the importance of modern foreign languages, but what has been the effect of the policies of the past five years? There has been a decline every year in the number of young people of 15 starting GCSE courses in French, Italian or Spanish, and an even sharper decline in the number of those gaining grade C or above in their GCSE two years later. There has been a UK-wide decline as well, but the figures for Welsh young people show that as a proportion significantly fewer pupils are coming out of Welsh schools with qualifications in those languages.
	Does that matter? I believe that it does. There was a view kicking around some years ago that given globalisation, and with English being the language of Microsoft, perhaps it was not so important any more for people to be multilingual, and that the English language would suffice for doing business. That view has been proved false. Companies value people with language dexterity, and it is important for trading and business relationships to have people who can go into other cultural and national contexts and speak other languages. Welsh young people who do not have such qualifications and are presented with opportunities such as the ERASMUS programmethe EU-funded exchange programme that enables students to spend a year or a term of their university course in a European universitywill find that such options are not open to them because they do not have A-levels or good GCSEs in modern foreign languages.
	Those are the points that I believe are relevant to today's discussion.

John Smith: I am grateful for the opportunity to speak in the annual Welsh affairs debate. We do not have many opportunities in the House nowadays to discuss Welsh issues exclusively, so the debate is welcome.
	As previous speakers have said, our debate today takes place against the backdrop of a serious global economic crisispossibly the worst international financial crisis in the past 100 years. I would therefore like, in the short time available to me, to refer to three projects in my constituency, but not parochially, because they all have valuable strategic Welsh importance. I want to use today's opportunity to draw the House's attention to several issues surrounding the projects.
	The Conservative spokesperson has already mentioned the first project. It will come as no surprise to hon. Members when I refer to the defence technical academy in St. Athan in my constituency. It is progressing well. It was recently announced that Sodexho is to be the equity partner, replacing Land Securities Trillium, which had to withdraw becauselet us make no bones about itof the financial crisis. However, in many respects, Sodexho is a better fit. Unlike its predecessors, its core activity is facilities management, and it has been involved in the scheme from day one. It was always involved, but it has just become a 50:50 equity partner.
	The Minister for the Armed Forces made a statement in the House, saying that the negotiations were progressing well and were on track. A clear timetable is developing. A detailed planning application for the scheme will be submitted in May this year and construction will commence around August next year. That timetable is important, because we have lost time in the past two years, mainly because the project is so large and complex. It is the biggest single Ministry of Defence investment and its importance for Wales cannot be overestimated.
	The project will provide 5,000 direct jobs and train annually 25,000 service personnel from all three services. It will provide a defence training strategy in some of the most sought-after skills in the worldtechnical, engineering and information technology skills. I have always argued that the real value to Wales as a wholenot only to my constituencyis not the 5,000 jobs or the 12 billion private finance initiative investment over 25 to 30 years, or even the revenue, which runs to tens of millions of pounds, that will go directly to the local economy, but the transformation of Wales's reputation to that of a country that is a centre of technical and skills excellence. Our reputation for being dominatedstillby metal manufacture and mineral extraction can be transformed into a reputation for high value-added technology. That is the benefit: a change of reputation and an ability to attract inward investment.
	I am delighted that a Command Paper was put before the House on Tuesday, offering a contingent liability of 40 million to prepare the plans for this year and the design to get on with the construction next year.

David Jones: As the hon. Gentleman will know, we on the Conservative Benches also strongly support the St. Athan project. Does he agree that one of the key benefits of St. Athan will be to improve the perception of the military as a career for young people, with the high-quality jobs that if offers, and in particular as a career for Welsh young people? Does he agree that, today more than ever, going into the military is a good, attractive career for young Welsh people?

John Smith: I agree with every word that the hon. Gentleman just said. Indeed, he should forgive me if I have not referred to that point, because the overriding benefit of the project will be to improve training in the military. Perhaps I should remind the House that, unlike now, every technical qualification that will be achieved at the new academy will be a civilian-recognised qualification. We will be producing engineers for the future, including civilian engineers, so I accept the hon. Gentleman's remarks. We also had all-party support, which in my view is one of the reasons why we won the bid in the first place.

Lembit �pik: I applaud the cross-party work that the hon. Gentleman has done to secure those jobs. Does he agree that one of the opportunities for Wales will be not to repeat the errors at Deepcut Army barracksI understand that they are being shut down, with some of the work perhaps coming to Waleswhere Cheryl James, the daughter of one my constituents, was, I believe, murdered?

John Smith: Of course I agree with that.
	St. Athan has been a huge success story for Wales and for Welsh politics. We won the bid because we were united across the parties and becauselet us be clear about thisours was the best bid. However, I must sound a rather disconcerting note this afternoon. The Command Paper was presented to the House on Tuesday, butI have given notice of this to the hon. Gentleman involvedit was blocked. An obscure procedural motion was used on Tuesday on a point of order to block the contingent liability of 40 million. The process cannot be stopped, but the effect of what was done on Tuesday could be to delay a recession-busting project that is vital for our country.
	I am sure that every Welsh Member of this House will condemn the hon. Member for The Wrekin (Mark Pritchard). I understand why he objects to the scheme: because he lost the bid. I understand his protesting, but what is reckless and unacceptable is his bid to block the progress of the scheme. It is important that we move ahead with the planning in May. I call on all hon. Members to condemn his action. I am afraid that I must say to Conservative Members in particular: for goodness' sake, bring some influence to bear on him, because he is delaying a vital project.

Stephen Crabb: I understand the hon. Gentleman's passion and commitment to the St. Athan project. We would all recognise and applaud that. However, it is deeply unfair of him to talk in such terms about my hon. Friend the Member for The Wrekin (Mark Pritchard), who is not here and who does not have an opportunity to defend himself.

John Smith: I gave noticeI have been in the House long enough to realise that I should do that. What I am doing today I do with a heavy heart. I have never done it before, but the project is too vital to play silly political games with it. The future of Wales is at risk.

Daniel Kawczynski: As the neighbour of my hon. Friend the Member for The Wrekin (Mark Pritchard), may I say that he is an assiduous constituency MP and works extremely hard? As Opposition MPs, it is the responsibility of us all to scrutinise Government decisions.

John Smith: We have an overriding responsibility to behave responsibly. I will leave it at that, because I gain no personal benefit from making such comments, but it is important that I should make them today.
	The second, related issue that I wish to raise is about an important piece of transport infrastructure: the M4 link road to Cardiff international airportthat is, to Wales's international airport. That has a bearing on the technical academy, because although we will not lose the academy if we do not get the timing for that road right, we might lose some of the benefits that could come to Wales. The onus is on us to maximise all the benefits from the investment, to ensure that Welsh people and Welsh businesses benefit first from the huge opportunity that is coming our way. We must get the transport links. Businesses in Pembrokeshire and west Wales will benefit, as will businesses in Monmouth and mid-Wales. We must get the transport infrastructure right and the M4 airport link road is a crucial factor in it, because it will serve the defence technical academy, and it will serve Barrythe second largest town in Walesas well as providing a link to the airport.
	A decision is imminent. We have had the public consultation and the Welsh Assembly Government's Deputy First Minister will take a decision shortly. The biggest decision to date has been about which route to choose. It is controversialit will affect local people, so there is a lot of local concern about the impact on people's quality of lifebut the decision on the route of the direct link to the airport is crucial. I call on the Minister to use all his influence with the Welsh Assembly Government to ensure that the decision is taken, and taken quickly.
	I am deeply concerned that there may be prevarication and second thoughts about the strategic importance of this road; we should be in no doubt that this link road is crucial. We will never have a country seriously recognised throughout the world unless we have a serious international airport that provides comprehensive scheduled flights across the world. Air travel is still the cutting edge of business communication, even in comparison with broadbandI accept everything said about it earlierand Wales must have a proper international airport. What we have now is a holiday charter airport; it is growing and doing well, but as the aviation White Paper said, it has a long way to go. This road is an absolutely necessary condition for the growth and expansion of Cardiff international airport. It may not be a sufficient factor, but as I say, it is absolutely necessary.
	I flag up that issue because I hope that we will not make the mistakes of the past by thinking that some funding for a few extra routes or a few extra slots to European cities will provide us with the strategic advances that we need for the airport's future. The entire business community supports the road: the CBI in Wales, the Federation of Small Businesses, the Cardiff business club. Indeed, there is not a business in Wales that fails to recognise the importance of strategic access to the airport. It is supported by the planning authorities and it has been supported by every management of every company that has owned the airport over the past three decades.
	It is a crucial issueone of the most important road transport issues in Wales. We are really at the cusp, right on the edge, of making a decision on a matter that will drive the Wales international airport forward. The decision must be taken quickly and the right decision must be takenthat is, identifying what route to take, not having second thoughts about whether we need such access to the airport.
	Finally, a third project based in my constituency is also of international importance. It has already been mentioned in earlier debates. I refer to the Severn tidal barrage. I am delighted that the Government have gone out to public consultation on the four shortlisted possibilities. I favour, as I have for the past 20 or 30 years, a large barrage from Lavernock Point to Brean Down. The scheme will provide 5 per cent. of the UK's energy needs for the next 100 years, and it could provide the entireI repeat, entireenergy needs for Wales for the next 120 years. The source is clean and renewable, and once the structure is there, it is cheap. We have a natural asset on our coastat 42 ft, the highest rise and fall of tide in the worldso we can use our human ingenuity to harness the power of that tide. That will not only provide us with a cheap and environmentally friendly source of energy for our country, but contribute to the overriding threat to the world of climate change. Of course we have to consider carefully the environmental implications of such a project, and we have to carry out the feasibility study, but our overriding concern must surely be ensuring a source of energy for Wales for the future.

Adam Price: It is a pleasure to follow the hon. Member for Vale of Glamorgan (John Smith), who is clearly proving an effective advocate for his part of Wales. I would like to focus on the economic crisis, which was at the heart of many of the speeches that we have heard. I particularly want to consider the role of banking and the effect of the crisis on Wales. In some ways, because we do not have an indigenous banking sector to speak of, we have been shielded from the direct effects, but of course we are dealing with the indirect repercussions of the banking crisis.
	As I see it, we face three categories of problems, the first of which is access to affordable mortgages. It particularly affects first-time buyers, who are benefiting from a fall in prices but are not able to get a mortgage because banks and building societies now often ask for loan-to-value ratio of 75 per cent. A 25 or 30 per cent. deposit is nigh-on impossible for first-time buyers. The second category of problem is the lack of normal credit facilities for small and medium-sized businesses; we have heard about that from a number of hon. Members. The third category is more long term. I foresee a possible long-term negative effect on public confidence in saving per se. That will affect pensionsreturns on equity investment are being hitand financial inclusion. People look at what is happening in the banking system and are clearly suffering anxiety about the safety of their savings and investments. They are also experiencing a tightening of credit as a result of the crisis.
	Those trends are particularly acute in the UK because of the absence of local and publicly owned savings banks, which are a typical element of the banking system in many European countries. The UK has a highly concentrated banking sector, in which there are a small number of very large institutionsinstitutions that, as we have seen, have unfortunately engaged in highly risky and slightly exotic investment activities over the past few years.
	The banking sector is also concentrated geographically, in the sense that it is essentially focused on London and, to a lesser extent, Scotland. There has been a withdrawal of regional banking facilities, so the traditional role of the banking managereven the business banking managerwho had a personal relationship with their customers has disappeared to some extent. The linkage between banks and the communities and businesses that they serve has become weaker in recent years.
	The crisis gives us an opportunity to shift the balance again. There is a need to have local and, I would say, publicly owned banking institutions as part of the mix. In particular, there is a need for banks that focus more narrowly on traditional banking and do not get involved in some of the investment banking activities that were an important contributor to the current crisis. In Wales, which lacks a local banking institution, there is an opportunity to create indigenous financial institutions. The Welsh Assembly Government, through their activity with the economic summit, are looking at increasing their ability to impact positively on the economy in Wales. Having an indigenous banking institution that is directly owned by the public sector, or over which the public sector has some leverage, is an important component of a medium-term economic strategy in Wales. As Geraint Talfan Davies wrote recently in the  Western Mail, in some waysalmost perverselythis is quite a good time to consider launching a new banking institution. A bank that does not have toxic assets on its balance sheet because it is a new institution could be a favourable proposition.
	There are models out there. The Sparkassen, for instance, are local savings banks in Germany, rooted in local communities. Some services are provided by the Landesbanken, which operate as an umbrella institution owned at Land level by the regional governments. They have been very successful: about half the retail sector in Germany involves the Sparkassen. They have been unaffected by the financial crisis. Indeed, many have increased their lending because they are seen as a safe beta credit-worthy, trusted institution.
	Many European countries have a mixed economy in banking. In Germany, the private sector represents only 12 per cent. of the overall banking sector. Even Switzerland, which is famous for private institutions which may or may not be involved in nefarious tax-evading activities, has cantonal banks which are owned by local government, and which deal with 30 per cent. of the banking business of ordinary individuals. That model offers us a way forward in Wales.
	According to a recent  Financial Times survey, 81 per cent. of people in the United Kingdom support the idea of the locally owned, publicly owned savings bank as an alternative to what has been on offer. We used to have that in the UK, of course: we had the Post Office Savings Bank, which became National Savings, and we still have the remnants in National Savings and Investment. We also had Girobank, the people's bank, which was launched in the late 1960s and was very successful. It was the first bank in the world to launch telephone banking, and was also instrumental in launching the Link ATM network. Unfortunately it was privatised, perhaps because it was too successful.
	There is still a residual element of the municipal bank movement. There are six municipal banks left in Scotland, and Birmingham city councilBirmingham was the site of the first municipal banksays that it is considering creating a new one by means of a private Bill with which the House would deal later in the year. Ceredigion is considering the possibility of creating Wales's first- ever municipal bank in order to provide credit for local businesses.
	Local authorities have the ability to offer mortgages. Birmingham city council is considering providing a top-up scheme in partnership with building societies. If the building societies were willing to lend the first 75 per cent. to first-time buyers, the council would provide perhaps 15 per cent. to make the purchase affordable. The Welsh Local Government Association is conducting research, as are the Welsh Assembly Government, to establish whether an umbrella product could be created through local authorities, possibly in conjunction with a new institution. I hope that it will be possible for the Westminster and Welsh Assembly Governments to act in partnership, but clearly the Treasury would have some decisions to make.

Albert Owen: The hon. Gentleman is right to refer to localism. A network that already exists in Wales, based on the Irish model, is the credit union network. Credit unions offer personal finance opportunities, and because of the safety mechanism that they represent, they are growing during the recession. Does the hon. Gentleman welcome that, and does he believe that the Welsh Assembly Government and others should do more to promote credit unions?

Adam Price: I absolutely agree. Credit unions could be part of this new mixed economy in banking and financial services. I mentioned Germany; the third element in the German tripartite banking system is the co-operative movementthe Volksbankenwhich is its equivalent of the credit unions. We need to build up the credit unions, and they might form partnerships with municipal banks. Municipal banks can legally take deposits, but they cannot offer loans. If membership of a credit union were linked in with holding a retail deposit in a municipal bank, one could have a complete array of financial services, and with local authority mortgages as well. These are exciting possibilities, and it would be relatively simple for the new savings banks to link up with the plumbing of the wider banking industry through the SWIFT system. They could provide other financial products from other institutions. This could be done on a low-cost basis and relatively quickly.
	As hon. Members will know from their own experiences, there is a gap in terms of business banking. Finance Wales provided just 110 loans in 2008. There is an issue to do with European law, in that it has to offer those loans at between 4 and 10 per cent. above the European reference rate, so they can be relatively expensive. Finance Wales is, essentially, a quasi-investment bank or kind of venture capital organisation, in that it looks at a small number of high-growth-potential firms, which leaves a gap in the market in terms of ordinary business banking for the vast majority of enterprises. Birmingham and Essex in England are looking at using local authorities' ability to offer loans on an unregulated basis. Birmingham is talking of offering 200 million in loans to local businesses. That could address some of the problems in the short term, but we need to create something similar to the Landesbankenlocally owned savings banks in conjunction with local authorities, and then an umbrella national institution that aggregates that and is able to provide a higher level of loans, pooling risk and providing expertise.
	We could also pool some of the reserves held in the public sector, both in the Welsh Assembly Government and local authorities. Instead of putting that in Icelandic banks, and suffering as a result, why not keep it and invest it in a Welsh-owned institution that could then offer loans to Welsh businesses and that could also take deposits from retail customers? Too often in the past, what has happened is that retail deposits given by Welsh customers have not been reinvested in the Welsh economy, but have been used by financial institutions based elsewhere, and we have seen very little benefit.
	Finally, if we did create this new architecture of Welsh financial institutions, it would greatly help if the Welsh Assembly had borrowing powers. I understand that the Labour party in Scotland has now made a submission to the Calman commission making the case for borrowing powers for the Scottish Government, and the Northern Ireland Executive already has them. It would be positive if the Labour party in Wales were also to back having borrowing powers, perhaps in its submission to the Holtham commission, because that could underpin any new financial institution we were able to create.

Don Touhig: No one could have predicted that a problem that began with banks in America would lead to people throughout this country sitting at their kitchen tables worrying about their finances. Although the economic downturn we face is correctly described as global, its impact is local in the sense that every family in Wales has been affected.
	It is right of our Government to act now to boost the economy. Whatever the doom and gloom merchants say, that means borrowing more in the short term to help keep the economy moving and to help businesses and families during these tough times. Some have argued that we should not borrow to boost the economy. They would leave it to the market, but that would mean us abandoning families and businesses in Britain who are facing difficult timesfamilies who struggle with the loss of a job or to pay a mortgage, and the small business man or woman who has put everything into setting up the business. To stand back and do nothing to help them would have terrible consequences.
	We have to learn the lessons of the past. Laissez-faire policies are not the answer, as we saw in the two recessions in the '80s and '90s. Those recessions tore into the very fabric of society, causing massive damage. In my constituency, young people leaving education had no job to go to. People who had worked all their lives in the same industry were condemned to the scrap heap, and pensioners were expected to live on 69 a week. In the south Wales valleys, the experience that some called Thatcherism we called despair.
	If anything, the credit crunch has made us all realise how interdependent we all are. The very last thing that we in Wales need now is to turn in on ourselves in a narrow, nationalist sense and embrace the separatist agenda. However, I note that these days new Plaid has very little to say about independence, and it certainly does not mention the arc of prosperity to which it once said we should belong. Frankly, when someone is worrying about how they are going to put food on the table and whether they are going to meet this month's mortgage payment or even keep their job, the last thing they want from their political leaders is a sterile constitutional debate. I therefore hope that we can have some respite from more bids for powers for the Welsh Assembly. Now that the eminent diplomat charged with running the convention on whether or not Wales should have a referendum on more powers is busy in the Balkans, perhaps those who want to balkanise Britain will now leave it alone for a while.

Adam Price: I should be interested to hear the right hon. Gentleman's response to my practical and relevant suggestion that additional borrowing powers for the Welsh Assembly Government would, in fact, help us to combat the economic crisis that we face.

Don Touhig: I was very happy to give way to the architect of new Plaid, and I think that he had some positive and important things to say. I am sure that they will be listened to by Ministers, because these problems will not be solved unless we all work together. I recognise that that is an important point to make.
	One of the vital strengths of the Welsh economy is the readiness of our companies, both large and small, to use flexibility and to make and take opportunities for enterprise and innovation. Although we have made great strides in encouraging people to establish businesses in WalesWales is still a great place to invest and to grow a businessthere is much to do. We have to believe that we are going to come through this economic downturn. That belief is important to our future.
	Our economy will grow and our standards of living will improve, but we must be cautious about putting up what some may say could be barriers to investment. Here, of course, I am referring to the proposed Welsh language legislative competence order, which will be considered by this House in the coming months. My right hon. Friend the Secretary of State referred to a BBC reporter's blog; it is good to see that the licence payer's money is being used to help BBC journalists in Cardiff to promote their own political prejudices. We all know the BBC and its prejudices.
	That LCO could be the biggest shot in the arm for the Welsh language in modern times, so I welcome the announcements by the Secretary of State for Wales and the First Minister, who have promised the widest possible consultation. Certainly, for my part, I am content that the Welsh Assembly should have the responsibility for dealing with matters relating to the language, but such a power, should it be given, must be exercised in the interests of all Welsh men and womenthe 20 per cent. who are bilingual and the 80 per cent. who are not. In the coming months, I intend to ask a number of questions about the LCO, because it is not simply about the Welsh language; it will have an impact on our economy. Macro-economic policy is not devolved, and we have a proper duty and a right in this place to ask questions.

David Jones: The right hon. Gentleman is making an important point about the Welsh language LCO. Does he agree with me that it is a proper function of the Select Committee not only to scrutinise the bid itself, but to scrutinise, by taking appropriate evidence, the measures that might be brought forward under the terms of the LCO, if it is passed?

Don Touhig: The hon. Gentleman makes an important point, and I shall answer it in a moment.
	It is not good enough in this instance for us to be told that the Assembly will decide the measureshow it will use the new powersif the LCO is passed. We cannot take a suck it and see approach. We need to know now and in some detail the implications of the measures for jobs, the economy and the voluntary sector in Wales.
	I have many friends whose first language is Welsh, and I celebrated with some of them at a 40th wedding anniversary party last week. They do not want to become part of some linguistic crachach, in which jobs are reserved for the 20 per cent. of our countrymen and women who are bilingual and denied to the 80 per cent. who are not. Let us have the consultation and the debate we needlet the people of Wales speak. I encourage every business, voluntary group and individual to write to their MP and AM, the Welsh Secretary and the First Minister and ask questionsstarting with questions about what the LCO will mean for them, their company or the charity they work for.

Madeleine Moon: Does my right hon. Friend agree that it would be helpful to have a clear understanding of how much we spend every year on implementing existing legislation on the Welsh language, so that we know how much it costs the Welsh Assembly, the voluntary sector and the business sector? Then we could estimate the future spend as well.

Don Touhig: That could be a question for scrutiny by the Welsh Affairs Committee. I am sure that hon. Members on both sides of the House will receive letters from their constituents about that matter.
	With the country facing serious economic challenges, along with the rest of the world, it would be a serious step indeed to impose even more regulation on companies in Wales. I have one final word on this matter. Over the years, we have had very successful Welsh language policies. My right hon. Friend the Secretary of State referred to the Wales Office's language policy; I was the Minister who oversaw the introduction of that very successful policy. Such policies have been adopted by companies and the voluntary sectorI emphasis the word voluntary. I hope that during consideration of the LCO, the idea of making any language scheme voluntary will be considered and ultimately adopted. I think that that would be supported across Wales.
	For all the challenges that the present economic downturn brings, we must never lose sight of the fact that Wales is part of a global economy that will double in size over the next 20 years. The ideas expressed in the debate so far will contribute to the debate on how we approach that growth. There will be great opportunities in the future, but we must be ready to grab them. Our underlying purpose should be to make Wales a global leader in all those industries and services where our skills, our creativity, our enterprise and particularly our flexibility is known and is world-class.
	The Work Foundation has published a report called Manufacturing and the Knowledge Economy. It argues that the old way of separating manufacturing and services does not reflect the interconnected, interdependent nature of modern manufacturing, and I agree. Companies such as Rolls-Royce make more money from service contracts, sales of licences and hours of flight time on their engines than from manufacturing the engines in the first place. Car makers run finance houses offering loans to people who want to buy cars, and pharmaceutical companies offer health care services as well as selling drugs.
	The great challenges that we will face in the coming years are not Welsh but global, and we have to be able to compete. Our real competitive advantage will be our knowledge base and capacity for innovation. In simple terms, we have to be smarter, quicker and more adaptable than our competitors. The world is undergoing a new industrial revolutionthe knowledge revolutionfuelled by the pace of technological change, and Wales must be at the forefront. The only way in which countries such as Wales will be able to compete is to retrain and upskill our work force to face the challenges of the future. We have to stay ahead, with new and innovative ideas, which we can fully exploit only if we have the skills to do so. Put simply, we have to stake a claim to be the linchpin of the new knowledge economy.
	With those challenges come great opportunities, and Wales could and should be at the forefront of making the most of them. I have always believed in our great strength as a society and in our capacity to respond rapidly to changing circumstances. However, we are facing challenges that may be greater than any that we have faced before, and we cannot be found wanting. There is too much at stake.

Lembit �pik: It is clear that, as in previous recessions, manufacturing in Wales has suffered more than any other industry. We all know that, according to a CBI survey, demand for manufactured goods in Britain is at its worst for 17 years but, like the right hon. Member for Islwyn (Mr. Touhig), I believe that the recession offers us an opportunity. He accurately encapsulated the importance of having the right attitude to the challenges that we face.
	In my constituency of Montgomeryshire, as in all Welsh constituencies, small, medium and large businesses face real hardship. Recently, I have made sure that, as far as possible, I am aware of the difficulties that businesses on the high street and in the local manufacturing base face. I have met many representatives from companies that are experiencing difficulty, including Woolworths, which of course tragically closed not long ago, and Stadco, which is threatening to cut more than 100 jobs in Llanfyllin.
	In addition, I have met representatives from Floform in Welshpool, which closed dramatically and suddenly a week ago, and I have met Gareth Pugh, whose construction business in Abermule seems to be going well despite his problems getting loans from the banks. I have also met people from Total Network Solutions and dozens of other companies.
	I have also listened to the voices in Westminster clamouring for long-term solutions to the crisis. In particular, I have listened long and hard to my hon. Friend the Member for Twickenham (Dr. Cable), our esteemed economics spokesperson. I think that I can say without fear of contradiction that, at the moment, he is effectively the Chancellor of Britain.
	The definition of the problem is pretty straightforward. I think that we in mid-Wales have been in recession for about three years now: without a new direction for our Wales economy, I believe that the problems that we face will only spiral. Salaries in Montgomeryshire and in Brecon and Radnorshire are down in real terms, according to objective data. We also know that unemployment in Wales alone has risen by 28 per cent. in the past year. This month, it affects 7 per cent. of the Welsh population. There has also been a 69 per cent. increase in jobseeker's allowance claimants in Montgomeryshire in the past year.
	Even the farming industry has suffered in the past few years. It has been blighted by bluetongue and bovine TB, and there is also the continuing dispute about how farmers are able to control foxes. The inability to control that pest in the most efficient way has an economic cost for farmers in my constituency. Therefore, I hope that the Minister will assure the House that he will do everything he can to prevent the introduction of electronic identification tags for sheep in Wales, which would merely place even greater pressure on our already overstretched farmers and rural economy.
	Like many other constituencies in Wales, mine has seen businesses close. Powys had the highest VAT deregistration rate in Wales in 2007, with 54 businesses closing and huge job cuts as a result. Manufacturing firms have been predominantly affected by the shrinking of consumer demand. I have mentioned a number of those companies already, but this week I learned that Control Techniques, a very successful international electrical firm in Newtown, is facing another 30 redundancies in the very near future.
	As a result, it seems to me that both the Welsh Assembly and the Government here must produce a specific plan of action, because the rescue packages that have been announced so far are not making a discernible difference in Montgomeryshire. I certainly do not deny that the Government are operating in good faith, and I support many of the proposals that they have made, but we need the action being taken to achieve results before many more jobs are lost.
	In that sense, I want to thank the Minister for agreeing to come to a meeting that I hope to arrange in the very near future. He will be able to hear directly about the problems that local small and medium-sized businesses in Montgomeryshire are facing. He has been generous in making that commitment of his time, and I assure him that he will have a constructive and insightful session. I believe that it will probably give him a good insight into the typical problems facing small and medium-sized businesses across rural Wales as a whole.
	The core issue, it seems to me, relates to the banks. They should not be reining in overdrafts and increasing interest rates on overdrafts for their existing customers, as they have. I am sorry to report to the Minister that much of the good work that is being put in place by the Government is being undermined by the banks, which are paying lip service to their partnership with the Government but, in any practical sense, are reining in the level of debt that their existing customers can secure.
	The Secretary of State already knows that in my constituency successful businesses have been forced to accept massive reductions in their overdraft facilities. I accept the conflicting demands on banks to shore up capital as well as to increase lending to small businesses, but they are in full knowledge of the support that the Government are giving them, yet they refuse to extend a hand to those businesses that are struggling to get by without their help. The message is simply not getting through.
	I find individual bank managers very co-operative, and have had many useful meetings with the major banks, but I am very close to naming those banks in my constituency that do not co-operate with the needs of business people. I hope that the Minister can pass that message through the Treasury to the banks, which are effectively in national control. They are morally obliged to co-operate to ensure that we do not lose more jobs needlessly in Montgomeryshire and across Wales as a whole.
	I would also suggest that we need a rather clearer economic narrative for Wales, and that has been touched on by other speakers, as well as an overarching strategy to pull us out of the recession. I am sure that a number of hon. Members would also agree that with the downturn mid-Wales has the potential to be the environmental capital of Britain, as we have seen through the Centre for Alternative Technology and the fact that we export many ideas to other parts of Britain and Europe. The other side of that should be to create specific eco-companies that lead the way with green technology development as well as exporting those ideas elsewhere. If we look at Wales as an eco-nation, we can ride the wave of a growth industry at a time when we need to clarify our political narrative.
	Let me make two more short points. In mid-Wales, we are fast becoming not only the eco-capital of Britain but the wind turbine capital of Britain. There are mixed reactions to turbines, but in my view those turbines and the strategy of enforcing the installation of hundreds of new turbines in the form of wind farms in Montgomeryshire is misguided. They do not produce baseload because they are not a reliable form of energy. Although I would not be against them if they provided a substantial contribution to British energy requirements, my worry is that we would need 2,000 turbines to replace a single conventional power station. When the larger proposals come forward, as they will inevitably find their way to Westminster rather than Cardiff due to the exigencies of the legislation, I hope that local opinions and the cost-benefit analysis will be taken objectively into account. Although it looks like the Government are doing something when the turbines go up, they are not necessarily making as good an environmental policy decision as it might at first sight appear.
	My other point is one of praise, and concerns flooding in Montgomeryshire. The Severn flood plan occupies an extensive proportion of the land area of my constituency and we have been blighted with some serious flooding issues over the past few years. I have been working with the Environment Agency to see whether we can modify some of the policies that are imposed. A number of my constituents are concerned that they will end up as the victims of enforced flooding in order to protect other towns and settlements downstream. I am happy to report that as a result of conversations with the Environment Agency and Ministers, the Environment Agency has modified its policies, specifically policy 6, in order to take local concerns and feedback into consideration in its decision-making activities. That is a success story and it shows that if one works strategically with the Environment Agency and similar bodies, one can make a local difference by altering national policies for the greater good. I thank Wales Office Ministers for their co-operation in achieving an all-round good result.
	I should like real progress, with a partnership approach in terms of both economics and the environmental considerations that particularly affect Montgomeryshire. With the right infrastructure developments, both in connecting the rest of Britain to Wales through improved rail, road and air links, as well as a continued commitment to improving the canal and waterway system throughout Wales, we could see Welsh tourism flourish under the credit crunch, when more and more people will choose to holiday in the UK.
	I close with two requests. The first is that if the Government are genuinely to feed a large amount of money into trying to restart the economy, they could do a lot worse than invest in reconnecting Montgomery canal to the rest of the network. It is a multi-million pound scheme of construction work that would provide much-needed employment in the sectors that are suffering most.
	My second and final request is that the Minister heeds the advice of others who have spoken today to take a strategic approach to developing a hub and spokes air service across Wales. I declare an interest as a pilot in a fledgling air taxi company, which formerly transported the right hon. Member for Neath (Mr. Hain)without accident. I offer my humble services to fly the Minister about if he wants but, more importantly, to ensure that Cardiff international airport is connected to Welshpool international airportif I can describe it thusfor the greater good of connecting Wales by air, not, we hope, just for economic benefit but for cultural benefit too.
	I look forward to seeing the Minister in my constituency and I shall make sure that his visit is satisfactory and worth while, both for him and for the businesspeople whom he will meet.

Julie Morgan: It is great that we are holding this debate, celebrating St. David's day three days early. When I was preparing for the debate, I learned that St. David is sometimes called the patron saint of vegetarians, which was news to me. He was a committed ascetic and beer was banned in his monasteries.
	I wondered how those interesting points related to modern-day Wales. The Secretary of State mentioned the historic task of the Welsh rugby team tomorrow evening in France. If the team is successful, I do not know what St. David would think about the celebrations, but I certainly think that we all wish the team every success tomorrow evening in France.
	We are going through a difficult time economically in Wales and throughout the UK. As has already been said, it is important to tackle the economic difficulties at all levelsinternationally, nationally, in Wales and locally. I am pleased that the Prime Minister is going to the United States next week to speak to both Houses of Congress, to hear at first hand the details of President Obama's plans and to see how we can work together internationally to tackle the crisis.
	There are long-term and short-term things we can do to help the economy in Wales. Transport links should be improved, and I am pleased that the Government are planning such improvements, in particular the rail links to Heathrow and the electrification of the railway line from London to Wales. On Tuesday, I was pleased to meet Lord Adonis in the all-party group chaired by my hon. Friend the Member for Swansea, East (Mrs. James). Other Members in the Chamber this afternoon attended the meeting, too. Lord Adonis accepts the point that if south and west Wales is to attract business and develop its economy, it is essential that direct links to Heathrow are developed. Ideally, that would involve trains from south Wales running directly to Heathrow, via a loop from the main line to Paddington. A connection near Heathrow is being considered, with a shuttle service to the airport, but a direct service from south Wales to Heathrow would be infinitely preferable. I also support improvement to Cardiff airport in Rhoose.
	Many right hon. and hon. Members have signed my early-day motion, which urges the International Baccalaureate Organisation to stay at its base in Cardiff and now has 125 signatures. I thank those Members for their support. Sadly, at the organisation's board meeting two weeks ago, it confirmed its plan to move its European base to Amsterdam. It described Cardiff as remote and criticised the transport links. I condemn its decision, which does not recognise the work of its 330 staff, who have made it such a success. It now intends to expand, doubling the number of students, to create three international hubs, with Amsterdam as the European one.
	Plans to improve links to Heathrow might have played a role if their implementation had been much more imminent, but the organisation's mind was set on no longer having its headquarters in Cardiff and Wales. That highlights the importance of transport links, particularly those to Heathrow. The electrification of the main line from London to Heathrow must not stop at Bristol. The Severn tunnel must not be used as an excuse not to continue the electrification into Wales. We must do all that we can to influence the Government to ensure that that happens.
	To help in the present situation, we must also push forward the capital building programme, something that the Government are already trying to do. I am very pleased that we in Cardiff, North have been given the go-ahead for the 70 million Whitchurch hospital development, which will provide acute and out-patient facilities. I hope that that will start this year, as it will be a big boost to the building industry, as well as an improvement to mental health services. It will replace the old asylum-style Whitchurch hospital, which is preserved by Cadw and has a certain charm but is certainly totally unsuitable for the treatment of mental health patients in the 21st century.
	The plan to build a new hospital has caused anxiety among some mental health patients in Cardiff, because the day facilityTegfanwill be knocked down as part of the process. However, we hope that another place has been identified in the hospital's grounds, where a small capital building programme will produce another day centre. If all that starts this year, it will be very positive and help both the mental health facilities and all the builders, plasterers, carpenters, brickies and everyone who will get the work if those capital building programmes go ahead.
	I am very pleased that the go-ahead has been given for the Cardiff, North medical centre. It is a much smaller project, but it will also stimulate the building industry in my constituency and provide good, up-to-date facilities for the people of Pontprennau, Thornhill, Llanishen and all the people of Cardiff, North. The original building was lost to a devastating fire.
	I welcome the extra millions of pounds committed by the Government, as my hon. Friend the Member for Vale of Glamorgan (John Smith) said, to the defence training academy at St. Athan in the Vale of Glamorgan, which is accessible to people coming from my constituency and all the surrounding constituencies in south Wales. Again, the capital building programme will provide a great impetus to all the building trades, as well providing long-term employment. Introducing such capital spending is one of the key ways to keep employment and boost the building trade. Transport and a capital building programme are two of the things that we should be working on.
	I pay tribute to the Education and Skills Ministers in the AssemblyJane Hutt and John Griffithsfor their extreme swiftness in developing the ProAct programme. It is an ideal programme, under which people will not fester at home when they are unable to work. They will be able to go out and get skills that will enable them to improve their job chances or to continue in their jobs with increased skills. That is exactly the sort of programme that we want. We have discussed today how many people it has reached, and obviously we do not yet know how many firms and individuals have benefited from it. However, I understand that 150 firms asked for information, and no doubt many of those requests will develop into actual help.
	It is important that the Government look again at the planned reductions in the number of civil servants. There have been plans to downsize the civil service to make efficiency savings, and if there are jobs that are not productive and efficiencies can be made, we should make them. However, it is worrying that the cuts will be made when there is growing unemployment in areas where civil servants are working. Furthermore, there is a real problem at the Department for Work and Pensions, given that more people need help. It makes no sense to reduce the number of civil servants and offices at the Department, given that there will be huge demand for its services. The Cabinet Office Minister at the Committee meeting that I attended this morning acknowledged that we should look at that issueperhaps the DWP will need more, rather than fewer, civil servants, given that we want to give individual help to people so that they can get jobs.
	Finally, I want to make a point about the Severn tidal barrage. I am glad that we have reached the stage of considering the short-listed schemes. We have to weigh the huge advantages of the energy that the barrage can produce against the environmental consequences and come to a decision about which will give the greater boost to the environment. Sometimes when we hear about the environmental disadvantages, we do not weigh them against the huge environmental advantages. Obviously, I want to see what the impact study comes up with, but I come from the position that the barrage would be a great step forward to harness all the power of the Severn estuary. I accept that it will be a tragedy if the Severn bore goes and I know that there are environmentally damaging features, but let us weigh those against the huge increase in energy provision.
	In conclusion, I should say that St. David's most famous affirmation was that we should do the little things; I did know that he had said that. We need to do the little things at local government and community level and build up to the international level. In that way, we will be able to tackle the difficult economic situation together.

Dai Davies: People in my constituency have campaigned against the funding formula for local government for more than 10 years. I was recently at yet another presentation by Lord Barnett, who accepted yet again that there is a need to consider a needs-based formula. My constituency's uplift for this year of 1.5 per cent. will result in the loss of front-line services and a staff reduction. In my opinion, that is unacceptable. I urge the Government to bring forward a review of the Barnett formula at the earliest opportunity. The Assembly is looking into the issue, but the time being wasted is costing our constituencies very much.
	The worry is that the 500 million cut for next year will be even worse for us; that cut in services will go very deep. I also ask the Government to review the rates on empty property. If local government bodies own industrial parks, they have to pay hundreds of thousands of pounds in empty property tax. The principle behind the taxto get people to use properties quicklywas good. However, given the economic crisis that we are in at the moment, that is not a reality.
	I am sorry to say that the problem with the banks is not new; it has been going on in my constituency for a considerable time. I raised the issue in 2006 in the House, soon after I first entered it. The problem is that average wages in my constituency are around the 17,000 mark, but house prices there average 100,000. Banks were giving 100 per cent. mortgages, the debt bubble just grew and grew and nothing was done to reduce it until the global crisis.
	Credit card interest is a huge problem. The interest rates are absolutely enormous and cost our constituents huge amounts of money on the basis of what they borrow. Taking the point made by the hon. Member for Brecon and Radnorshire (Mr. Williams), we need to do all that we can to put money into people's pockets, as well as looking at loans to businesses. I support loans to businesses, but without people buying, those businesses will still sufferthey will just borrow more and more.
	We have heard a lot about the global economy. This country of oursWales, I meanhas exported for hundreds of years. It has led the way in exporting. Going back to the civil war in America, we exported cannon balls. We have exported everything, from coal to steel toas nowmodern technology. The problem is that those at the top over the past 10 years have got richer and richer while those at the bottom have suffered because of it. There will always be enough in this world for everybody's needs, but there will never be enough for someone's greed, and the greed of those individuals has destroyed the financial services. The financial control of these companies belongs to the many, not the few. We need to bring bank controls back to local economies and local areasthrough credit unions, for example.
	On regeneration, one of the projects that is vital not only to my constituency but to that of the Secretary of State and to constituencies along the Heads of the Valleys road is the dualling of that road. It is a massive project that will take a long time, but delaying it is causing huge problems to businesses in our areas. It is also a huge opportunity for construction and people's jobs. I urge the Secretary of State to do all that he can to bring that project forward.
	We have heard about rail services. The launch of the rail link in my constituency last Februarya year ago nowhas been so successful that the passenger numbers projected for the fourth year are travelling on it already. That is a fantastic demonstration of what rail can do for us. I urge the Secretary of State and the Government to look at where we can extend rail services. That is a massive opportunity. We had services across all our valley communities, and we need them back.
	The shadow Secretary of State touched on tourism, but she did not mention history. The history of the south Wales valley built the world. The industrial revolution spread from Cardiff to Merthyr to Torfaen to Blaenau Gwent. There is a massive opportunity to tell our story, especially to the Americans. We virtually built Americalet us bring them back to spend their money in our constituencies! To do that, however, we need integrated transport. Bus services and rail services need to work together. They are not doing that at the moment: they are increasing in one area and reducing in another. We have seen regional buses taken off and bus services cut. That is not good news for us.
	The Welfare Reform Bill is going through Parliament. Last week, I mentioned that in my constituency we have 3,000 people looking for work and 6,000 people on incapacity benefita total of 9,000 people and an average of 200 to 250 jobs. That does not fit. However, the training opportunities are huge, and that is a real goal. Within that, we must get joined-up services. The hon. Member for Cardiff, North (Julie Morgan) mentioned jobseekers and jobcentres. Jobcentres need to work with other organisations as well. When individuals enter them, they are dealt with just in that one place. There is lots of help out there, but we need joined-up thinking, not working in isolation.
	Funding for further education has been raised on several occasions. I urge the Secretary of StateI know that this is a subject very close to his heartto speak to the people at the sharp end. When we as politicians speak to the people who run these facilities and educational establishments, they tend to tell us what we want to hear. Staff and students in the three establishments that cover my constituency, tell me that they are in trouble. They will not be able to provide the services that they do already, and certainly not the services that we need for training opportunities.
	I want to touch on two other subjects. The first is the steel industry, which is close to the hearts of many hon. Members. There are continuing problems in that industry. The main plant shut down in my constituency in 2002. Across the country at that time, we lost 10,000 jobs, and we are now seeing another 2,500 go. We must do everything we can to give the steel industry a level playing field. I have urged the Leader of the House to initiate a debate on the future of the steel industry, and I hope that that will happen in the near future. One of the areas for which we can use the industry is training. It has one of the best training records anywhere and I urge the Government to look at that when we look at the apprenticeships Bill. The opportunity in Wales to use the industry to train is massive.
	Lastly, I have another big concern. I know that many Members have been in contact with the police authorities and the police themselves about threatened and perceived cuts to police funding. We hear from this House that money is being spent and that more police are on the streets, but in my constituency we have seen some police stations shut down and some have cut their hours, and there are fewer police on the streets. We need to get the record straight, whichever side is right or wrong. We need to come together and sort it out. In a time of downturn, we will see more people on the streets. We may well see more crime because of it, with people forced into situations such as house repossessions. It is not going to be easy, but we need to work together to ensure that our communities are safe and ready when the global downturn turns around, so that we are there to respond to it.

Paul Flynn: The problems of the credit crunch in my constituency mainly affect the manufacturing sector. At one point, 50 per cent. of Newport's work force were involved in manufacturing, and about half of that figure are involved now. We have had serious problems, such as redundancies and short-time working in Novelis, Quinns radiators in Llanwern and Panasonic. These are terrible blows to the many thousands of workers concerned and their families. The only good thing to have come out of this recession is that there have not been any closures. No one has closed down a plant, or a section of plant, and then demolished the plant itself. Sadly, that happened in Llanwern in the last recession, where they started to knock down the coke ovens in the very week that the price of coke rocketed throughout the world, and we ended up importing coke from China.
	There is optimism that the manufacturing industry will be ready to take off when we come out of the other side of recession. There are some good news stories. A month ago, a plant opened on the docks in Newport, at Sims, which is the biggest of its type in the world, and it is next to two other plants that are the biggest of their type in the world. The Sims plant deals with redundant electronic equipment under the waste electrical and electronic equipment directive, and it is a remarkable piece of machinery. Old computers, vacuum cleaners, calculators and so on are wheeled in one side, and at the other end they come out as four different types of plastic, metals and precious metals such as silver. It is a wonderful piece of equipment that is unique to the world, and the biggest in the world. Next to it, on the same docks, is the biggest piece of end-of-life car recycling equipment in the world, and next to that is the biggest refrigeration recycling plant in the world, which is also the most efficient at extracting gas. There are therefore some good news stories to tell.
	Much that is good is happening in Wales this year. It is the 10th anniversary of having our own Government on the soil of our country for the first time in centuries, and we should acknowledge what a success that has been, particularly the One Wales agreement, through which two parties are working together to give us stable government in Wales that can plan for the future. I am looking forward to that anniversary being suitably marked. Unfortunately, it is up against [ Laughter. ] I hear laughter from one of the obstacles that I was going to mention. The two main obstacles to the Assembly and drag anchors on it have been neurotically power-retentive Welsh Members of this House who weep when they see power flowing down the M4 to Cardiff, and the inertia of civil servants who do not like change and are not attuned to taking on purely Welsh initiatives, particularly those that come from the Labour party. It is significant that about half a dozen of the civil servants at the Welsh Assembly earn more money than the First Minister himself.
	I have been asked to be brief, but I have great concerns about the Welsh language legislative competence order. I think that it will make little difference to the Welsh language. In 1961, Saunders Lewis made a great speech, entitled Tynged yr Iaith, that shook the Welsh-speaking nationsaying that the Welsh language would be dead by the year 2000. It should have died out centuries ago, given that it is spoken by fewer than 1 million people and is up against a great world language, but it has prospered magnificently. A list has been mentioned of prominent people from Wales who have won competitions on UK television for choirs, performers, singers or musicians. Many of them are the products of Welsh language education, because of its emphasis not just on the Welsh language but on music and acting skills. It is a great success story, and we have been successful in many other ways as well.

Don Touhig: Does my hon. Friend recognise that when we were councillors together, we made great strides in putting investment into Welsh medium education in Gwent, which has benefited greatly? That was done by Labour councillors.

Paul Flynn: My right hon. Friend tempts me: I came into politics as the secretary of an organisation to set up Welsh language schools in Gwent in 1969, when my late daughter came home from school and announced that she had learned her first ever Welsh song. I asked, How does it go? She said, It goes like this: 'The land of my fathers is dear to me'. Hen Wlad Fy Nhadau was being taught in English in Newport at that time. We have made huge strides, and I think that there are now six or seven schools that teach in the Welsh language. The Conservatives are right to take pride in the Education Reform Act 1988, which means that conversational Welsh can be spoken in English medium schools. Certainly the Labour party, Gwent county council and other Welsh councils have a lot to be proud of.
	My final point about the LCO is that I am concerned about what we are creating. The Welsh Affairs Committee is doing a prodigious amount of work on it, on top of all the other work that it has been doing successfully for years, but it is not the right body to be, as it has been described, a revising chamber for the Welsh Assembly. If such a thing is desirable, as it may well be, we should have an organisation that reflects the democratic votes of the people of Wales, which the Committee does not. More than a quarter of its members are Conservatives, and one of them does not represent a single Welsh vote. There are 25 Welsh Labour Members who do not have a voice on it at all.
	There are two organisations that represent all Welsh MPs. One is the Welsh Grand Committee, which I am afraid was set up as a sop for devolution many years ago and is mired in failure and futility. It is not thought of as a serious body at all. However, there is another body that should be re-exhumed: the Welsh parliamentary party. It was set up in 1888, and for the period between 1892 and 1906 held the balance of power in the Chamber. It could have taken over and acted in the same way as the Irish parliamentary party did at the time.
	The Welsh parliamentary party has gone through long periods of hibernation and been revived each time. The most recent revival was by a Conservative Secretary of State when the Conservatives wanted the Welsh Grand Committee to go to Wales. The Welsh parliamentary party put a condition on that, saying that the use of the Welsh language should be allowed, and that a monolingual Chamber here should not import monolingualism into Wales. That was the last time that the party met. The current situation is similar to the one in the 1930s, when Members of all parties decided that the challenge was so serious that it needed the input of all Welsh MPs, regardless of party affiliation. I believe that we should revive the Welsh parliamentary party, because it would be the ideal vehicle to deal with LCOs in a far more acceptable way. We cannot just have the Welsh Affairs Committee taking on that extra burden and becoming a revising chamber by default. We should decide what is the ideal way of doing things, and the best way is to have a body to revise LCOs that is open to every Welsh MP.

Daniel Kawczynski: I am the only English Member of Parliament to speak in the debate and I look forward to presenting a perspective on cross-border issues that affect my constituency of Shrewsbury as a result of devolution in Wales.
	It is appropriate to hold a debate on Walesit gives Welsh Members of Parliament a tremendous opportunity to talk about the Principality. However, I greatly regret that the Government have not fulfilled their commitment and kept their promises that we would have debates in the Chamber on the English regions, and that there would be a Question Time about the English regions. My regionthe west midlandshas more people than Wales and contributes more to the gross domestic product of the country as a whole than Wales, yet we have no Question Time and no opportunity to discuss the issues that affect us.

Don Touhig: In view of the hon. Gentleman's comments, I hope that the Conservative party will submit names for the regional Select Committees that the Government are trying to set up.

Daniel Kawczynski: I believe that we have. It is important that the Government introduce English regional debates.
	I believe that the seats in the United Kingdom

Madam Deputy Speaker: Order. The debate is about Welsh Affairs. However strongly the hon. Gentleman feels about issues that relate to other parts of the UK, I am sure that his remarks from now on will be about Welsh Affairs.

Daniel Kawczynski: Very much so, Madam Deputy Speaker. I was about to mention Montgomeryshire, which is the seat next to mine. The hon. Member for Montgomeryshire (Lembit pik), who has already spoken and is an assiduous Member of Parliament, represents 57,000 constituents, whereas, just across the border, I represent 74,000 constituents. That is a staggering extra 17,000 constituents with whom I must deal in comparison with the Welsh Member of Parliament just across the border. That is important, because we all want to do everything possible to support our constituents, table Westminster Hall debates for them and ask questions on their behalf. When Members of Parliament have the same budget, but 17,000 more constituents, that is a problem which we must tackle.

Lembit �pik: The hon. Gentleman gets the figures right, but he must also recognise that the geographical area that he covers is much smaller than mine. Montgomeryshire covers 765 square miles. If the constituencies get too big, they become unmanageable for geographical reasons. He has his cross to bear and I have mine.

Daniel Kawczynski: The hon. Gentleman is luckier than most because he flies around in his little plane. He has taken me up in his plane across our two constituencies, so I am sure that he can get around Montgomeryshire in his plane more easily than I can get around Shrewsbury and Atcham in my motor car.
	I want to consider proportional representation in Wales. I am joint chairman, with the hon. Member for Central Ayrshire (Mr. Donohoe), of the all-party group on the promotion of first past the post. We recently went to the Scottish Parliament to take evidence from Members of the Scottish Parliament about the problems that they have encountered with proportional representation. I perceive proportional representation in the Welsh Assembly as a threat ultimately to our electoral system in England. I believe that there should be one electoral system for the whole United Kingdom. At the end of the day, we are one country, and there should not be PR in Wales. Being elected under first past the post to represent a constituency makes one accountable to the people in that constituency. All parliamentarians here have a tremendous bond with their constituents. They know that we are accountable to them, that we live in the constituencies that we represent and that we are directly elected by them. In my view, PR is a travesty, which increases the distance between politicians and those who elect them.

Roger Williams: Has the hon. Gentleman checked that point of view with the leader of the Conservatives in the Welsh Assembly, who was elected under the proportional system?

Daniel Kawczynski: As the hon. Gentleman knows, my main duty is to England and I speak on behalf of my constituents.
	The Welsh Assembly creates huge difficulties for English border towns. As I said earlier, the Royal Shrewsbury hospital loses 2 million a year as a result of the different mechanism whereby the Welsh Assembly pays for treatment across the border. When I made that point to the Chairman of the Welsh Affairs Committee, he gave a derisory reply. We have patients coming from Wales to the Royal Shrewsbury hospital who get life-saving medication to which my constituents in Shrewsbury are not entitled. I have to fight tooth and nail to secure life-saving treatments for my constituents that people from Wales get automatically in our hospital. That causes huge frustration and anger and divides our two communities.
	Another problem is bovine tuberculosis. We in England had to kill 40,000 cows last year as a result of bovine TB. I am grateful that the Welsh Assembly is looking into that terrible problem and that it is holding trial culls of badgers in Wales. It is just a shame that there is not more co-operation between our Parliament here in London and the Welsh Assembly over the issue, which transcends our borders. There should be far more assimilation and co-operation in dealing with such major issues.
	The hon. Member for Montgomeryshire also mentioned flooding. He thanked the Minister for his intervention, which he said would prevent part of his constituency from being flooded. However, flooding causes tremendous misery on our side of the border. Shrewsbury floods repeatedly, as do all the other towns on the River Severn, through Herefordshire, Gloucestershire and Worcestershire, causing hundreds of millions of pounds of damage in lost business. The way to resolve the problem is not to have little barriers in each town, but to have a wet washland scheme at the source of the River Severn, across the border in Wales, which would flood a large piece of agricultural land, which would become a marsh in the summer, encouraging wildlife, and a lake in winter. However, the hon. Gentleman said that thanks to the Minister's intervention that proposal has been blocked. I shall be telling my constituents in Shrewsbury about that and trying to find out more about how the Minister intervened to prevent mere scrubland or agricultural land from being flooded in a rural part of mid-Wales. The Minister is happy to do that, despite all the suffering from flooding in Shrewsbury and all the other towns down the River Severn. That is simply unacceptable.
	On a positive note, I should like to put in a plug for the Wrexham-to-Marylebone rail service, which goes through Shrewsbury. Welsh and English MPs are working together to secure that link, which is vital for business and tourism. However, Virgin Trains and Arriva are doing everything possible with the Office of Rail Regulation to try to scupper that service. I very much hope that the Minister will do everything possible to safeguard that important service, which operates from Wrexham to London.
	I have great concerns about the grants that the Welsh Assembly gives to businesses, which are much greater than those that we can afford in England. Those grants are uncompetitive and unfair. They lead to many Shropshire firms going just across the border to set up business and thus causing[Hon. Members: Hear, hear.] Hon. Members are cheering, but those moves are leading to significant job losses in Shropshire.
	Finally, a lot of Welsh children come across the border to go to schools in my constituency. Many rural primary schools are under threat from closure because we receive only 3,300 per annum for every child and we are ranked 147th out of the 149 local education authorities in England, which is leading to huge pressure on our schools. I hope that the Minister will bear that in mind as well.
	I am trying to say this respectfully, as the only English MP in a Welsh debate, but what I am trying to get across is this: I love Wales. We went on holiday to Wales last year, to Mwnt bay, which is absolutely beautiful. My family and I even spent an afternoon on the beach in Mwnt with my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) and his family. During my holiday I also met the hon. Member for Ceredigion (Mark Williams) in Aberystwyth, in his constituency. We all love Wales and we all want to see it prosper.
	I am just trying to convey some of the problems and frustrations I have as a Member of Parliament representing a border town that is losing out in certain ways as a result of increasing changes between the Welsh Assembly and our own Parliament. I very much hope that we can all work across the border because, at the end of the day, we are one country and we should be working together to improve the lives of our constituents in both countries.

Albert Owen: It really is a pleasure to follow an English MP in this debate on Welsh day. I am very pleased to be able to speak on Welsh affairs. There are, as the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) mentioned, some cross-border issues, and there are occasions when I need to speak on English affairs. It worries me that the Conservatives have proposals for English-only votes on English-only matters. That would deny me as a Welsh MP the opportunity to represent the interests of my constituents when they go across the border for essential services.
	I believe in an integral United Kingdom and in the freedom of movement of people across the borders for services and goods. I have to say that I had thought that it was only the nationalists who believed in this type of segregation; yet the hon. Member for Shrewsbury and Atcham indicated that he wanted to lift up Offa's dyke to prevent Welsh people coming across the border and businesses coming from Shrewsbury into Wales. Well, we Welsh Members in this Parliament want an equal voice on matters affecting the whole of the United Kingdom. I am here today to represent the views of my constituents on some local matters, but also on those of national interest across the UK.
	In a few days' time, I hope to promote Anglesey, the mother of Wales, in the mother of Parliaments with an Anglesey day. I know that the Wales Office is co-operating on that matter so that all can benefit from the culture and heritage of Anglesey and from the economic advantages when people come into my constituency. It is about promoting my constituency.
	I want to refer in greater detail to a couple of important Welsh affairs issues, into which there have been inquiries. We have heard today about the important roleI disagree with my hon. Friend the Member for Newport, West (Paul Flynn) on this matterof the Welsh Affairs Select Committee. I think it does a good job of scrutinising Welsh legislation coming from the Assembly in the form of legislative competence orders. We take this matter seriously and we liaise with other MPs, so if they wish to raise any strong issues on behalf of their constituents, they will be fed into that mechanism.
	I want to concentrate on two particular inquiries and the difference they have made to the north-west Wales region and my constituency of Ynys Mn. The first was into prisons in Wales. We worked on the important issue of prisoners having to move far away from their homes to serve their sentencessometimes into south Wales from north Wales, but also into parts of England. That makes it very difficult for their families to visit them. The Select Committee identified the need for a prison in Wales and we lobbied particularly for a prison in north Wales.
	A few weeks ago, the Justice Secretary announced a preferred site for that prison in north-west Wales, and I am very pleased about that, as I lobbied hard for it. As a result of the recommendations of the Welsh Affairs Committee, that preferred site in Ferodo in north-west Wales will create hundreds of jobs in the area. The desolate site of the Ferodo factory, which has a nightmare industrial relations history, will now provide well-paid and secure jobs. That is good evidence of the Welsh Affairs Committee raising an issue and making recommendations, resulting in benefit to the people of north-west Wales and the people whom I represent. It is evidence of the UK Government delivering for the people of my area.
	Energy in Wales, which is relevant to everyone in the UK, was the subject of the other inquiry that I wish to deal with. We had a follow-up inquiry into clean coal and other technologies as well. One of the main findings that would benefit my constituencya cross-party recommendation, made by parties including the Liberal Democrats and Plaid Cymruwas that if new nuclear development went ahead, and the United Kingdom Government supported it, existing sites in Wales would benefit from that. That was a clear, cross-party view at the time. The recommendations said that the extension of Wylfa power station needed to be considered. I can inform the HouseI am sure that the Under-Secretary of State for Wales, the hon. Member for Caerphilly (Mr. David) will confirm this when he winds upthat there is movement on that issue. There is a full study looking into a possible extension, which would ensure two or three years' more generation at the Wylfa site. That would provide extra jobs, skills and opportunities to young people over that period.
	I want to inform and update Members on an issue that the hon. Member for Ludlow (Mr. Dunne) raised earlier, when he was present. He is a supporter of Anglesey Aluminium, because Bridgnorth Aluminium in his constituency is one of the main customers of Anglesey Aluminium. I declare an interest as chair of the all-party aluminium industry group. The hon. Gentleman and I are working together to keep that smelter open. There is a big issue about the power contract, which is due for renewal in September. That is threatening some 600 to 700 jobs in my constituency.
	All the political avenues are being explored, as I have explained in parliamentary questions, and indeed in the Welsh Grand Committeeanother issue on which I disagree with the hon. Member for Newport, West. I think that it is an important forum for raising issues. He does not agree, and neither do the press, but it is an opportunity for me to raise issues on behalf of my constituency. I welcome the fact that the Secretary of State is encouraging us to hold more of those Grand Committees. They are important. I do not have a blog; some people spend a lot of time on social websites, but I like to speak in this House, on behalf of my constituency, on important matters on as many opportunities as I can get.
	The issue of Anglesey Aluminium is complex, because Rio Tinto, the parent company, is shedding 14,000 jobs worldwide. It is also reducing the production of aluminium across the world, so this is a precarious moment for the aluminium industry and for the renewal of the contract. I assure the House that everybody is working together on the issue. The Welsh Assembly Government are working on a new biomass plant, after the closure of Wylfa. The Wales Office is acting as a host, and as a facilitator between the Welsh Assembly Government, the Department of Energy and Climate Change and the Department for Business, Enterprise and Regulatory Reform, to get the best political outcome. At the end of the day, it will be a commercial decision, but I hope that there are more favourable conditions, so that we can save those jobs.
	I want to talk more about nuclear power, green and low-carbon energies, and the opportunity for Wales to be a leader and a pioneer in the low-carbon economy. The Climate Change Act 2008, the Energy Act 2008 and planning provisions provide an excellent framework for the development of renewable energy. The Energy Act also provides us with renewables obligations, so that there can be progress on an industrial scale. That will help to ensure that there is benefit. We must have nuclear as part of a rich mix if we want a safe, continued electricity supply for industry and our homes. I think that we are moving towards consensus on that. I read this week in  The Independent that four leading environmentalists have said that they are pro-nuclear. One of them was a senior director of Greenpeace, who now sees the value of nuclear power. He calculates that the perceived risks associated with nuclear power are less than those posed by climate change and global warming. If we are to continue to build a prosperous, low-carbon economy, we need nuclear power. The UK Government, along with the Nuclear Decommissioning Authority, have listed a number of preferred sites for the first wave of new nuclear build. I am pleased to say that Wylfa is part of that first phase.
	A new nuclear power station in my area could create as many as 9,000 construction jobs, as well as the generating jobs that will follow. Those are highly-skilled, well-paid jobs that would benefit my constituents. There is only one brake on consensus. I read with dismay this week a letter in  The Western Mail that was written jointly by the chair and the environmental spokesperson of Plaid Cymru. The letter said that if Plaid Cymru was ever in power and had to make a decision on new nuclear on Anglesey, it would vote against it.

David Jones: I am interested in that last point. Does the hon. Gentleman know what the leader of Plaid Cymru in the Assembly would have to say about the matter?

Albert Owen: That is an interesting question, and that is what dismays me. The environmental spokesperson and the chair of Plaid Cymru, speaking about all these national issues on television, said that they would not back a nuclear power station in my constituency. In 2007, the Assembly Member for my constituency stood on a platform and said that he was fully in favour of nuclear power. I find it inconceivable that the leader of a serious political party can say that he is fully in favour of nuclear power while the chairman and the environmental spokesperson say that they are against it. Far from being enlightened about the position of the chairman and spokesman, the electorate of Ynys Mn are confused by the mixed message, at a time when jobs are at a premium.

Adam Price: Will the hon. Gentleman give way?

Albert Owen: I will, but I want my speech to be brief.

Adam Price: What is the position of the Labour Minister for Environment, Sustainability and Housing in the Welsh Assembly Government? What, indeed, is the position of the Welsh Assembly Government, who have said that they are against nuclear power? If the issue of nuclear power were devolved to the Welsh Assembly Government, the majority of Labour Members there would vote against it as well.

Albert Owen: The hon. Gentleman is trying to confuse the issue even further. I have lobbied the Minister of State, Department of Energy and Climate Change, my hon. and learned Friend the Member for North Warwickshire (Mr. O'Brien), in the House. I have lobbied on a platform with the leader of Plaid Cymru, saying that we need these jobs in the area. I have been consistent on the matter. The Prime Minister has visited my constituency, and he supports the development. The Labour party is delivering a preferred site that includes Wylfa.

Adam Price: rose

Albert Owen: I will not give way again. I am very short of time, and I want my hon. Friend the Member for Llanelli (Nia Griffith) to have an opportunity to speak.
	The mixed message must end. Plaid Cymru must end this division. It is putting jobs at risk. The Labour party is delivering on nuclear power in my constituency; the chair of Plaid Cymru would oppose it, and if Plaid Cymru were in power we would not have these opportunities.
	I want to send the clear message that Anglesey is open for business when it comes to a low-carbon economy. Nuclear power can be a catalyst to attract others. We have windmills in my constituency which were early prototypes and have subsequently been developed further, and I also support marine turbine energy, which can provide a skills base. At the core, however, is nuclear power.
	We are at a very important stage: Anglesey is now a preferred site. I want to see this happen, and the people whom I represent want to see it happen. They know that the Labour party in this place supports it, that the power is retained here, and that we will ensure that it happens.
	I am standing here and fighting for what my constituents want: new nuclear build in Wales. I am proud to do that, because I believe that it is important. We should be pioneers of a new age of electricity generation. Anglesey was a pioneer of education, and I want it to be the pioneer of clean energy for the future.

Nia Griffith: At this time, we are all rightly concerned about the economy. Every job loss is a devastating blow for the worker affected and his or her family. I know that there has been a tremendous amount of activity both at Cabinet level and among ordinary Members such as me, in groups such as the all-party parliamentary group for the steel and metal related industry. We have been lobbying the Secretary of State for Business, Enterprise and Regulatory Reform, who has agreed to attend a steel summit to meet the appropriate representatives of the manufacturing industry, and I know that many similar initiatives have been undertaken involving such industries as motor manufacturing. However, it is important that we do not fuel scaremongering rumours and talk the economy down. That will only sap confidence and stifle efforts to get the economy moving again.
	I share the concern expressed by hon. Members about the somewhat erratic and obstructive behaviour of some banks, including sudden changes in the terms and conditions of their lending. Some successful businesses in my constituency have been badly treated in that way, and only following my intervention have things got moving. That should not have been necessary. I hope that my right hon. Friend the Secretary of State will convey that message to the National Economic Council.
	An extremely important element of the Labour Government's strategy to help people through the economic downturn is the determination to carry on with public investment for the future. My own county, Carmarthenshire, has an impressive school building programme, but EU convergence funding is giving cause for real concern. Carmarthenshire has a number of projects that it is ready to proceed with, but it is experiencing difficulty in drawing down EU convergence funding via the Assembly. I have secured the agreement of the Deputy Minister for Regeneration in the Assembly to visit my constituency and meet council officers, but I would be grateful if my right hon. Friend the Secretary of State did all that he could to persuade Assembly Ministers to prioritise the release of convergence funding to projects that are ready to roll. I also ask him to impress upon Assembly Ministers the logic of extending the western valleys initiative to include not only Cross Hands, but the whole of the Gwendraeth valley, the most western of the south-west Wales coal mining valleys.
	I turn now to a very sensitive matter: foreign workers. It is important that when we consider such matters, we attack structures and not peoplethat we look at structures, and if necessary criticise them and seek to change them, rather than resort to racist attitudes and comments. We are all too aware that there are organisations out there whose agenda is to breed fear and hatred and to create scapegoats, and who seem to have money to spend on glossy and very deceptive leaflets. We need to take a clear stand against such organisations and their attitudes.
	I know from speaking to people in my constituency that they are not racist. They recognise the enormous contribution to Welsh society that people born abroad have made, particularly in our health service. They are, however, understandably alarmed when they hear rumours that contractors working on big infrastructure projects, such as the gas pipeline or the construction of the power station in Pembrokeshire, are taking on foreign workerssometimes in large numbers, according to the rumours. I would be very grateful if my right hon. Friend looked into this matter and found out why foreign workers are being taken on, supposedly in preference to Welsh workers. If this is happening, we must ask why. If it is happening because employers think they can get away with shoddier terms and conditionslower pay and fewer rightsthat needs to be sorted out.
	There was tremendous support among Labour Members for the Temporary and Agency Workers (Equal Treatment) Bill, and work has subsequently been done at both EU and national levels to improve terms and conditions for such workers, but we need to know exactly why these foreign firms appear to be giving preference to foreign workers. Using them on the cheap is not fair to our workers, who are being undercut, and it is not fair to foreign workers, who are being exploited. If foreign workers are being taken on instead of Welsh workers because our workers do not have the appropriate skills, we need to identify exactly what those skills are and make sure that we provide opportunities for our people to acquire them. We also need to think ahead about what skills will be necessary in future, particularly as we develop public infrastructure projectsand, it is to be hoped, when private sector opportunities open up as the economy picks up. We need to make sure, too, that we are equipping our young people to take up such opportunities.
	Lastly, may I ask my right hon. Friend to wear two hats at once: that of Secretary of State for Wales and that of Minister for digital inclusion? I should like to bring to his attention the excellent work of an organisation called UCanDoIT. At present, Trina Davison, a constituent of mine, is the only person working across the whole of south and west Wales who is providing the valuable service that UCanDoIT offers. What Trina does is work with housebound people in their homes to sort out computer equipment for them and link them up to the internet. In some cases, she is working with partially sighted people, and she teaches them to use special technology that reads things out to them and gives them access to computers, e-mail and the internet. I would be grateful if my right hon. Friend met me to discuss what more can be done to extend this excellent work in Wales and give more people the opportunity to get online. For people who are housebound, internet access is particularly important, both for potential employment opportunities and for social contact, which can greatly enhance well-being.

David Jones: As is the case with most St. David's day debates, this one has been thoughtful and generally good-natured, reflecting the good humour that is characteristic of our nation. I am indebted to the Secretary of State for the important information that today is, in fact, not St. David's day but the feast day of St. Isabel of France. Like him, I hope that that does not bode ill for tomorrow evening, although I am sure that it does not. Even in our part of Wales, where we prefer the spherical ball to the oval type, we are following the fortunes of the Wales team with great interest; indeed, a constituent of mine said only the other day that what he was particularly pleased about was that the only Englishman who is likely to get his hands on the Six Nations trophy is the engraver.
	The debate has, predictably, been dominated by concerns about the economy. The hon. Member for Aberavon (Dr. Francis), the Chairman of the Welsh Affairs Committee, spoke about his own constituency, but he also discussed the important work that his Committee is doing not only on the process and scrutiny of legislative competence orders but on the impact that present economic conditions are having on the Welsh economy. I must rise to the hon. Gentleman's defence and say that he is an excellent Chairman: he chairs the Committee with great sensitivity and great wisdom. He does not need to be told to crack the whip. He knows how, from time to time, to tighten the screw, but he does not need to crack the whip.
	We then passed on to the hon. Member for Ceredigion (Mark Williams), who also spoke about the impact of the current economic downturn. He spoke about the higher education sector, which is of course important, in his constituency and about the need for reskilling and upskilling. Importantly, he also mentioned the farming industry and the adverse impact that electronic identification of sheep will have on the Welsh agriculture sector if it is allowed to go ahead. My constituency is in many ways similar to his, and I can tell the House that many farmers there are very concerned about whether, if that system is introduced, it will be worth while continuing farming.
	The impact on the auction industry would also be substantial. I have spoken, for example, to the directors of Ruthin Farmers Auction Company, which regularly sells some 5,000 head of sheep in a session. They say that it will be quite impossible to read the ID tags of each individual sheep as it goes through. I therefore echo the hon. Gentleman's words and urge the Minister to do whatever he can to persuade DEFRA to obtain a derogation from this wrong-headed European legislation.
	We had a very short and focused contribution from the right hon. Member for Neath (Mr. Hain), who probably even now is sharing a railway carriage with my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan)I think that they are going to the same destination this evening. He spoke about a very important subject: Welsh broadcasting and English language broadcasting in Wales. There is no doubt that that sector is under severe threat. I commend to the Government what he had to say about the difficulties that the Welsh broadcasting industry is facing and suggest that they take his remarks on board.
	My hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) spoke about the deteriorating economic picture in his constituency. He spoke about the need for additional investment in further education and expressed his concern about the budgetary cuts imposed on the sector by the Assembly Government. He also made a important point about the importance of language skills. In Wales, we tend to obsess about the Welsh language, and it is important, but so are international languages. In an increasingly globalised world, foreign language skills are absolutely necessary and my hon. Friend was entirely right to make that point.
	We then heard from the hon. Member for Vale of Glamorgan (John Smith), who spoke up, as he has on so many occasions, for the St. Athan project, which is supported in all parts of the House. I reiterate the point that I made when I intervened on him: one of the most important aspects of St. Athan is that it provides highly skilled military jobs for young people and, specifically, that it offers those opportunities to young people from Wales. Wales has a fine military traditioneverybody in the House knows thatand St. Athan will be a huge asset to young people who wish to serve their country.
	The hon. Gentleman also spoke about the M4 link road, and other Members, including the hon. Member for Cardiff, North (Julie Morgan), spoke about the importance of transport. Transport is vital, as is the improvement of transport links. One concernI have expressed it previously, as have other Membersis the potential impact of the local transport legislation that gives the Welsh Assembly the power to impose trunk road charges in Wales. I strongly suggest that at a time such as this the last thing that Welsh road users need is an additional tax on driving along roads in their own country. Although the Assembly has those powers, I strongly counsel it not to use them.
	We had an interesting contribution from the hon. Member for Carmarthen, East and Dinefwr (Adam Price), who analysed the banking crisis and spoke about the prospect of a more local form of banking that is more publicly accountable. I know that the hon. Gentleman is a student of history, so I am sure that he will recall the efforts of Richard Williams of Llandudno at the end of the 1960s, who formed a company called Prif Trysorfa Cymru, or the Chief Welsh Treasury. That attracted some concern from the Board of Trade, so he renamed it the Welsh Black Sheep bank and issued 1 and 10 shilling notes. I am not sure whether the hon. Gentleman would want to resurrect that bank, but it is an interesting prospect.
	Talking of black sheep, we then had a contribution from the right hon. Member for Islwyn (Mr. Touhig). I do not intend any personal criticism of him; I am merely echoing the words of the hon. Member for Newport, West (Paul Flynn). The right hon. Gentleman made his usual robust points in his usual robust style. He expressed concerns that many Opposition Members have about the potential for the balkanisation of Britain if devolution is not handled sensitively. He made the important point that the Welsh language LCO must be carefully scrutinised. My party yields to no one in our support for the Welsh language, but we do not want to see it become a tool for division. Therefore it is vital that that LCO is scrutinised with great thoroughness.
	The hon. Member for Montgomeryshire (Lembit pik) spoke of the downturn in the economy and the effect on his constituency, which is primarily rural. He also expressed his concerns about electronic identification of sheep and the closure of businesses in his constituency, which he says has been in recession for some three years. He also spoke in favour of green technology, but against wind turbines.
	We then heard from the hon. Member for Cardiff, North, who also touched on economic issues and spoke about the need to improve transport links. She also spoke approvingly about St. Athan, and of the interesting ProAct programme, which I would like to hear more about, as it appears to be very innovative. At the moment, its achievements are small, but from tiny acorns do mighty oak trees grow. The hon. Lady said that the Severn tidal barrage project could have huge environmental benefits, but could also have huge environmental disbenefits. Careful scrutiny of the project will be needed to balance those competing concerns.
	We had a powerful contribution from the hon. Member for Blaenau Gwent (Mr. Davies), who spoke of the need for a review of the Barnett formula and expressed his concern about the potential for a 500 million budget cut for the Welsh Assembly. He spoke also of irresponsible banking practices and touched on the failure of regulation, which was also mentioned yesterday by the chairman of the Financial Services Authority in his evidence to the Treasury Committee. There certainly has been a failure of regulation, and I hope that the Government will address that.
	We had an upbeat contribution from the hon. Member for Newport, West. He said that his constituency is suffering from the downturn but that there have been no closures yet, and there are some bright spots. He talked about new recycling plants in his constituency, which are an extension of the green technology that may power the upturn when it comes.
	We had a contribution from my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), in which he reminded ususefullythat Wales is actually attached to England. He said that events on one side of the border have repercussions on the other, and he was right to highlight the effects that the policies of the Welsh Assembly are having on hospitals in his constituency. The Welsh Affairs Committee has touched on such matters, and it is clear that we have not got the settlement right. That is something that we have to address.
	We then heard from the hon. Member for Ynys Mn (Albert Owen), who spoke about his support for Wylfa and for Anglesey Aluminium. Both are important employers in his constituency and both are in danger from the downturn. Finally, we heard from the hon. Member for Llanelli (Nia Griffith), who expressed her concerns about the difficulty of drawing down funds for public building projects.
	The debate was dominated by economic concerns, and there is clearly an extraordinary amount of anxiety in the House about the downturn's effect on individual constituencies and on Wales as a whole. I believe that Wales has the potential to pull through those difficulties, but doing so will not be easy. I am sure that every Member of the House will work assiduously in the 12 months between now and the next time that we convene for this debate to ensure that the impact on our country is minimised.

Wayne David: It gives me great pleasure to respond to this St. David's day debate. As far as I am aware, he was not an ancestor mine, but he could be an antecedent of many of the hon. Members who have participated today. He lived a frugal life, and my hon. Friend the Member for Cardiff, North (Julie Morgan) reminded us that his only drink was water. He believed in brevity: he was a man of few words, like my right hon. Friend the Member for Neath (Mr. Hain), who gave a commendably brief speech this afternoon. He also focused on the little things in life, about which my right hon. Friend the Prime Minister reminded us in the note on this debate that he sent to all Welsh Members.
	I was pleased that nearly all those who contributed to the debate focused on the people whom they represent in their constituencies rather than on somewhat remote theories and activities. Most people in Wales are worried about the economy, and that was brought home to us in the passionate contributions from my right hon. Friend the Member for Islwyn (Mr. Touhig) and various other hon. Members, including my hon. Friend the Member for Llanelli (Nia Griffith).
	These are undoubtedly difficult times, but I want to stress that the Government are being very proactive. That is the important thing: we are doing everything that is humanly possible to demonstrate that we are on the side of ordinary people. For example, my right hon. Friend the Secretary of State and I have been travelling around Wales over the past few weeks, meeting the owners of small businesses in particular, and hearing at first hand about the difficulties that they face. We have listened to their views and ensured that they are articulated here in London, the centre of UK Government.
	The Wales Office has published the document Real help now, and it has proved to be very useful. The hon. Member for Ceredigion (Mark Williams) said that it has been extremely well received, but it is important to stress that that is not the end of the matter. The document will be constantly updated and made even more accessible to people throughout the length and breadth of Wales.
	The document clearly demonstrates how central Government here in London and the Welsh Assembly are working in partnership for the benefit of the people of Wales. I shall not go through all the schemes enumerated in it, but several hon. Members mentioned the ProAct programme, which is already delivering material benefits for people in Wales.
	Times are difficult, but it is important to stress that positive developments are also occurring in Wales, and we heard some references to them this afternoon. For instance, my hon. Friend the Member for Vale of Glamorgan (John Smith) referred to the defence technical academy, and mention was also made of the gas-fired power station in Pembrokeshire.
	My hon. Friend the Member for Llanelli said that she had heard rumours that large numbers of people from abroad might apply for jobs on infrastructure projects in her constituency. I assure her that we will do our utmost to make sure that the majority of those employed come from the local labour market, as it is very important that local people benefit from those investments.
	Similarly, the go-ahead has been given for a new prison at Caernarfon, as my hon. Friend the Member for Ynys Mn (Albert Owen) noted.
	A number of Members, including the hon. Members for Chesham and Amersham (Mrs. Gillan) and for Blaenau Gwent (Mr. Davies) referred to the positive developments with tourism in Wales. It is undoubtedly a very important area that we should exploit to the utmost given the value of the currency.
	Concern was expressed about a new nuclear power station to succeed Wylfa. The Wales Office is 100 per cent. behind a new nuclear power station in Ynys Mnlet there be no question about that. Members asked whether Wylfa will continue beyond March 2010. There is a possibility of that, but we will have to see exactly what the Nuclear Decommissioning Authority has to say.
	Another clear theme is the need not only to deal with the situation in which we find ourselves but to prepare and plan strategically for the future. The upturn will come, and I am confident that it will be a dynamic upturn. We have to invest in education and training, as the hon. Member for Preseli Pembrokeshire (Mr. Crabb) said. My hon. Friend the Member for Aberavon (Dr. Francis) and the hon. Member for Blaenau Gwent mentioned that, too. There can be no shortcuts. It is vital that we invest in education and trainingthere is no doubt about that.
	Equally, we have to invest in digitalisation. My right hon. Friend the Secretary of State, who is responsible for digital inclusion, is 100 per cent. behind ensuring that we have a comprehensive strategy to ensure that everyone benefits from the new technological revolution that is gathering momentum all the time.
	The hon. Member for Carmarthen, East and Dinefwr (Adam Price) had some impressive and innovative ideas about the new banking system that needs to emerge. His ideas will be well worth debating in future.
	A number of Members mentioned the need for a strategic investment in transport infrastructure. Again, the hon. Member for Chesham and Amersham referred to that, as did the hon. Member for Blaenau Gwent when he spoke about the Heads of the Valleys road. The hon. Member for Montgomeryshire (Lembit pik) referred to it, too, and I wholly agree with his comments. However, I am not so sure that I will take him up on his offer to join him on an aeroplane.
	The debate was also significant because we heard some trenchant and controversial remarks from my hon. Friend the Member for Newport, West (Paul Flynn). However, I believe that the Government of Wales Act 1998 has been very successful. Yes, it could be streamlined and improved, but basically it is working very well. One reason it is working well is the good work being undertaken by the Welsh Affairs Committee. To have good legislation, it is vital to have effective pre-legislative scrutiny. I believe that that is what the Welsh Affairs Committee provides. I say that because I shall be giving evidence to the Committee on Monday on the important issue of carers and I hope that its members will not be too hard on me.
	Obviously, another important issue that will come before the Welsh Affairs Committee is the Welsh language LCO. As a number of Members have said, it is important that in seeking to develop and promote the Welsh language we should seek consensus in Wales. We should take all the people of Wales with us, non-Welsh speakers as well as Welsh speakers. It is important to recognise that the advances with the Welsh language have been made because there has been not just an acceptance of it but positive support for it. That must be taken forward and that is the way to build the Welsh language for the future.
	I welcome the remarks from the English hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) because it is vital that we recognise that Wales is not separate from England and that the cross-border links between our two countries are important. The Welsh Affairs Committee, again, has highlighted the importance of that relationship at all times. However, I did take some exception to the implication in his remarks about the future of Welsh representation. He pointed out how many electors he represents and how many the hon. Member for Montgomeryshire represents. My concern is that some people in the Conservative party might therefore conclude that we need fewer Welsh MPs, and it would be a huge mistake to go down that road [ Interruption. ] Given the mutterings that we are hearing, I think that we are beginning to see the true face of the Conservative party again. This debate shows, above all else, that Welsh MPs have a vital role to play in the future development of Wales, and long may we have positive debates such as the one we have had this afternoon.
	 Question put and agreed to.
	 Resolved,
	That this House has considered the matter of Welsh Affairs.

HOUSING SUBSIDY

Motion made, and Question proposed, That this House do now adjourn. (Mr. Watts.)

Paul Burstow: I am grateful for the opportunity to raise in the House the issue of housing subsidy. I look forward to the Minister's response to our short debate on important issues that are of concern to my constituents, particularly those who pay rent to my local council.
	Tenants in my constituency want a decent home, but at present far too many of them do not have one. I shall illustrate what I mean. Recently, I had the opportunity to visit tenants on the Chaucer estate in my constituency. Tenants on the estate, especially in Chaucer house, showed me the water coming into their flats through the windows, the electrical, plumbing and heating systems that need to be renewed, the roofs that need repairing and the poor lighting and security systems that need replacing. Tenants on the Collingwood estate, especially in Balaam house, need much of the same work done to their block. Very simply, when it rains they want the rain to stay outside and not to come into their flats.
	People living on the Shanklin and Benhill estates want control of their heating costs, but above all they want new windows. The list could go on. Too many of the council homes in my constituency fail to meet the decent homes standards that we all want everyone not just to aspire to but to enjoy.
	Unfortunately, my hon. Friend the Member for Carshalton and Wallington (Tom Brake) cannot be in the Chamber this evening, but he very much supports the sentiments that I am expressing. If he were here, he would want the Minister to be aware of the St. Helier estate in his constituency, where 800 box bathrooms were installed more than 40 years ago, to the delight of tenants at the time. They were meant to last only for 15 years, yet they are still there today. Furthermore, they are becoming a nightmare for the tenants, not just because they are coming away from the houses but because they are also full of asbestos, which might have been thought appropriate building material 40 years ago but, as we know, is no longer acceptable.
	My purpose in seeking the debate is to askeven begthe Minister to do whatever he can to unlock the funds of 120 million allocated to Sutton by the Department for Communities and Local Government, and to do it now because the need is so great and so urgentreally urgent in the case of the box bathrooms. Against that background of need for investment in decent homes, council tenants find it hard to believe that so much of what they pay in rent does not stay in the borough.
	A tenant in my constituency paying rent to Sutton council might reasonably expect the rent to go towards maintaining their home and providing services for themselves and their neighbours who are council tenants, as would any tenant anywhere. It should be clear to tenants who is accountable for setting the rent that they pay and who is responsible for the quality of housing and services that they receive.
	Good government requires accountability, and accountability requires transparency. It should be easy for people to understand where the taxes and rents they pay go, but that is not the case with municipal rents. The current system is complex, unfair and unjust; even the language is obscure and hard to follow. Just what is a negative housing subsidy?
	In hard cash terms, negative subsidy means that in the coming year tenants in my constituency and the borough of Sutton as a whole will contribute 10.5 million in rent to the Treasury. That is on top of 9.8 million in the current year. In effect, tenants in Sutton, Cheam and Worcester Park pay their rent to the Treasury from 1 April until some time in the middle of August. To put it another way, 38p in every 1 of the rent they pay goes back to the Treasury as negative subsidy.
	When I meet tenants and particularly when I meet the Sutton Federation of Tenants and Residents Associations and its chair, Jean Crossby, they and she want to know where is the justice in the system. Why is their rent not spent entirely on their housing needs or on the needs of their local community?
	It is no surprise that the figures for the 28 housing stock-owning Greater London boroughs have been analysed, and the Minister would expect me to rehearse the figures with him this evening. The analysis reveals that, on a per household basis, tenants in the London borough of Sutton are paying the highest negative subsidy in Greater London. Sutton tenants have been paying the Treasury for so many years that the council's ability to provide a good management service to its tenants and properly maintain their homes has been badly compromised.
	In an answer to a question that I asked the Minister recently, he said that decisions on rents are matters for each local housing authority. I do not dispute the fact that that is true in some ways, but I shall explain why it is not entirely the case. The way that the subsidy and negative subsidy system works drives local rent-setting decisions, first, because the system allows the Government to redirect what they calculate to be excess resources in one locality to areas in other parts of the country that they calculate have a shortage of resources and, secondly, because the Government's policy of rent convergence with housing association rents has resulted in above-inflation increases in Sutton since 2001.
	This coming year in Sutton, rents will increase by 6.27 per cent. on average, in accordance with the Government's guidelines and the formulae laid down in them. That will hit families very hard. It is particularly ironic, given the Government's determination to encourage local authorities to set the lowest council tax that they possibly can, with some success across the country, that the direction of travel on rents is the opposite.
	Research by my local arm's length management organisationthe Sutton Housing Partnershiphas found that 44 per cent. of tenants do not receive housing benefit and will therefore pay full rent. One in three of those families have children under 16. The Government have a laudable and certainly well supported target of halving child poverty. Given that those families often live just above the measure of poverty that would tip them into receiving housing benefit, it is hard to understand how the Government's rent policy and subsidy system support that goal of halving child poverty.
	I appreciate that the Department has been conducting a review. Indeed, I met one of the Minister's predecessors a couple of years ago, and we were pleased that the then Minister indicated that the review would be commenced. I understand that it might be published in April. I hope that the Minister will confirm the timetable for the publication, promulgation and implementation of its findings and recommendations, but no matter what is decided and what the Government choose to do, it will take time to have effect.
	The Sutton Federation of Tenants and Residents Associations tells me that, while it waits for those decisions to be made and the changes to be implemented, there should be no further increase in the amount that tenants pay to the Treasury. That is not an unreasonable point, and on the association's behalf I ask the Minister to say in his response whether the Government will seriously consider freezing negative housing subsidy at 2008-09 levelsif not, why not?until the review is concluded and acted upon.
	Of course, this is not just about redistributing rental income from one poorish set of tenants to an even poorer set of tenants, to benefit their area because it does not have enough resources. The Treasury is a net beneficiary of the system; it pays out less in subsidy that it gets back in negative subsidy. Indeed, in 2008-09, the Treasury pocketed 200 million of tenants' rents. What is happening to that money? Where is the transparency that will allow us to see what is happening with it? Where is the accountability?
	I am told that, by 2011, the Treasury will profit from the housing subsidy system to the tune of 400 million, and nothing in the system as currently conceived and implemented will stop that rising still further. In that sense, I agree with the Local Government Association and many others who say that the current system is not fit for purpose.
	The current system leaves vital local services such as the building, repair and maintenance of council housing starved of cash. All the money in the housing system should be spent on homes and related services. The system undermines local decision making, and makes it hard to hold local councillors to account for their actions; they could argue, and with some legitimacy, that the Department has not done its bit in making sure that local need is properly met. That is why the system should be scrapped.
	Local housing should be managed and funded locally in the interests of tenants and of meeting local housing needs. In my area there is not much local housing because of the right to buy. Day after day, when people come to my surgery or write to me, I am confronted with the appalling situation of having to explain how limited the ability to help is, because the supply is not there to meet their legitimate housing needs. I am sure that many hon. Members share those sentiments.
	I began this debate by listing some of the problems with housing in my constituency. The Minister will know that Sutton established an arm's length management organisation in 2005 with the aim of bidding for decent homes funding. I understand that the Department has confirmed that an allocation of 120 million has been made for that purpose, but that money is locked up and waiting for an Audit Commission inspection of the ALMO. Last year, the ALMO narrowly missed the two-star outcome required to trigger the release of the money. Since then, efforts have been redoubled to make sure that it exceeds that standard when the next inspection takes place.
	Just last week, Councillor Sean Brennan, the leader of Sutton council, wrote to the Minister for Housing to urge her to exercise discretion and authorise the release of the 120 million now so that work on the borough's decent homes programme could get started. At a time such as this, when the economy needs all the stimulus that it can get, much-needed investment could be a vital lifeline for the construction trades in my area and make an enormous difference to the quality of life of many of my constituents.
	In conclusion, I am grateful to have had this opportunity to air these issues in the House this evening. Tenants in my constituency face a 6.27 per cent. rent increase this April; 38p in every 1 of their rent will go to the Treasury. There is a desperate need to invest in social housing in my area and to deliver the decent homes standards. On 25 March, tenants from the London borough of Sutton will come to Westminster to lobby for the fair deal that I have been talking about. They will deliver a petition to the Prime Minister at No. 10 Downing street.
	My final request is this. Will the Minister, or the Minister for Housing, meet me, my hon. Friend the Member for Carshalton and Wallington and a small deputationwe do not want to overwhelm anyoneof our constituents, so that they can make their case personally and directly and ask the questions on their minds about the issues that I have tried to describe this evening? Better still, will the Minister accept an invitation from me to visit Sutton? He could have a look at some of the issues that I have described in words today, but are often better seen first hand in the constituency. He could talk to some of the tenants whom I have mentioned this evening, and the officials, to discuss the challenges. I hope that the Minister will be able to give a positive response to that request and meet at a time acceptable to us all.
	Above all, I have raised this issue tonight on behalf of constituents who want a fair and transparent system of housing finance, a rapid end to a discredited and unfair systemand decent housing.

Iain Wright: I congratulate the hon. Member for Sutton and Cheam (Mr. Burstow) on securing this debate. He may be aware that we had a good debate in Westminster Hall yesterday afternoon on the matter of council housing and rents policy. Many of the points raised in yesterday's debate have been echoed by him tonight. I agree that housing in general, the role of the local authority in providing housing, the cost of providing housing, and the rent that tenants of council housing properties pay are incredibly important issues. As the hon. Gentleman rightly said, it all comes down to decent homes. I am grateful to him for giving me the opportunity to address the points again.
	Yesterday, in my opening remarks, I made clear the role of central Government in the setting of council house rents; following the hon. Gentleman's speech, I feel that I have to do so again. He hinted that central Government somehow impose high levels of rent increases on tenants that are at odds with current levels of inflation and with what local councils want to do. I have to confirm to the House that that is emphatically not the case. Rent setting for council house tenants is a matter for each local authority. He mentioned accountability; local authorities are accountable to their electorate for rent setting. Guideline rents for local authorities form part of each year's housing revenue account subsidy determination, for the purposes of making assumptions about a local authority's income and its entitlement to subsidy. However, we do not, and cannot, force a local authority to set a particular increase in rents. I repeat: rent setting, particularly the matter of deciding the annual increase in rents paid by tenants, remains a matter for the local authority.

Paul Burstow: If a local housing authority were to decide that it wished to make itself accountable to its local tenants and refused to pass on the negative housing subsidy, would that be acceptable?

Iain Wright: I will come to that. The hon. Gentleman makes an important point, which is essentially the fundamental point of the debate, about how we fund council housing.
	Since the 1930s, successive Governments have used the subsidy system that the hon. Gentleman mentions to ensure that the country's council housing stock is funded and maintained. He is aware that as matters stand the national housing revenue account redistributes revenue from councils that are deemed to have surplus income on housing to local authorities that do not have enough. The policy is that social rents should be affordable and below those of the private rented sector. We are very keen to ensure that councils do not raise their rents beyond what people can afford, although I should preface that by saying that local authorities are free to set whatever rents they like. Some councils are unable to raise locally what they need to spend on their council housing stock, so as a means of keeping all rents affordable the housing revenue account system redistributes resources from councils that make more in rental income than they spend to those that do not have enough.
	I think that the hon. Gentleman would agree that in basic terms there is a logic and a rationale for having redistribution. It brings a degree of equity between councils. It protects certain tenants from high rent bills, and it helps by not adding to the burden of the general taxpayer. When discussed like that, it seems simple, straightforward and something that could possibly be welcomed. It is certainly better than the situation that occurred before 1989, whereby council house tenants' rents were allowed to be used locally to keep the rates of more affluent residents artificially low. It is also better than the situation that we inherited in 1997I know that this concerns the hon. Gentlemanwhen we had a backlog of some 19 billion in repairs and maintenance in the council housing stock. He is aware that we initiated the decent homes programme, which has transformedrevolutionised, I would suggestthe fabric and condition of social housing. In 2001, we brought in the major repairs allowance, which provided 1.5 billion: a massive injection of resources to stop long-term deterioration of the stock.
	Those factors, together with allowances for management and maintenance and provision for debt, are resourced through the subsidy systemtenants' rents and, when needed, subsidy from central Government. However, I am fully aware of the argument that the hon. Gentleman has made. I am also fully aware of the sense of despair and frustration at local examples of unfairness, and of the sheer incomprehension of many of the complexities of the situation. I do not disagree with any of those sentiments. The annual subsidy determination process has become more difficult to understand and the process more opaque and baffling to councils and council house tenants alike. The current system, with its annual subsidy determination, is too short-term in its scope. The need to make decisions on funding year on year makes it difficult for councils to plan, manage and maintain their assets over the long term. As the hon. Gentleman saidI agree with him fully on thisit is difficult, if not impossible, for tenants to see a clear link between the rents they pay and the services that are provided locally.
	This lack of local transparency is a particular concern of mine, especially as the Government are absolutely determined to see decisions on services made locally and in a transparent way. In addition, the whole landscape of housing has changed over the past 20 to 25 years with the emergence of large-scale voluntary transfers, a greater number of tenants with registered social landlords and right to buy. As a result, there are increased levels of mixed tenure on estates that 20 years ago might have been purely council housing estates. Bearing all of that in mind, it is right and proper to look again at the HRA system and its rules to ensure that it operates in the fairest possible way for both tenants and council taxpayers.
	The hon. Gentleman mentioned that this year we have had the added complication of the housing revenue account system moving into surplus, which then goes back to the Treasury. As he rightly said, about 200 million was generated in surplus from the HRA this year. I fully understand that that is hugely unpopular with tenants throughout the country, but we should put it into some sort of context. This year, the Treasury is pumping 5.9 billion into housing expenditure, which puts the 200 million surplus from the HRA into perspective. Secondly, since 2001, there has been a deficit in the housing revenue account system, which has been topped up by the Exchequer to the tune of about 1.3 billion. Thirdly, the national HRA was in overall surplus from 1994, the first year in which we have records, to 2001. So I plead with the hon. Gentleman that we need to have some degree of perspective and to understand that we are not looking at some unprecedented or unique feature.
	We have a system of financing council housing that moves periodically from surplus to deficit and back into surplus. I hope that the hon. Gentleman appreciates that I understand people's frustrations with the system, and I especially understand the frustration of tenants in Sutton, where the HRA system has been in surplus over the past couple of years and redistributed away from the area. That is why we have embarked upon a fundamental review of council housing finance. The review was launched last year and has as its objective the need to develop a sustainable long-term system for financing council housing while taking into account the following key principles: fairness and affordability for tenants and taxpayers; transparency to ensure, as I said earlier, a clear and accurate relationship between services provided and rents paid; agreed minimum standards of service and accommodation, ensuring that council house tenants are not hindered by poor levels of management and maintenance, a factor that the hon. Gentleman mentioned; and more certainty and less volatility in the funding of council housing. I am keen to see greater levels of efficiency and value for money, with more emphasis upon planned, as opposed to reactive, maintenance. I hope that the review will look into that.
	The review is on track to report to Ministers in the spring, and thereafter we will go out to consultation to discuss the revised process. As I have said before at this Dispatch Box, given the huge importance and complexity of the process, it is not something that can be tinkered with around the edges or undertaken quickly. It needs to be considered as part of a fundamental look at how council housing should be funded. We want to make the system fairer to tenants and do not wish to take risks in a way that would hinder that objective.

Paul Burstow: Will the Minister respond to the suggestion made by many of my tenants that increases in the subsidy should be frozen while the review is going forward and being implemented? There should be no further increases in the contribution that my tenants have to make to the general pool.

Iain Wright: I understand why tenants in Sutton would want to think that, but I would throw that question back. About 50 local authorities receive subsidy at the moment because their need for housing cannot be provided locally through the setting of rents. What do we do with those 50 local authorities? That is a fundamental point. There may be some means of having a transition period in order to move a fairer system, but to tinker with things while undertaking a fundamental review would be wrong and misplaced, so I cannot give residents in Sutton the reassurance they would wish for. However, we are fully aware of people's concerns and want to ensure that the system is fairer and more transparent and that we fund council housing sustainably.
	The hon. Gentleman said that he will be bringing a delegation of residents downI think on 25 March. I would be more than happy to meet them to discuss the matter further. I am keen to see that his tenants and all tenants have access to decent and sustainable housing in a way that is fair to council tax payers, general taxpayers and tenants alike.

Paul Burstow: I am grateful to the Minister for the opportunity to meet him. We will be in touch to sort out the logistics, and I am sure that having read this debate tenants will appreciate the opportunity to discuss these exchanges with him. Will he address the other concern that I raised, which was the need to unlock the decent homes funding? That is the other thing that many tenants in my area want sorted out.

Iain Wright: Again, I understand the concerns, and I believe that about 113 million could be available. The hon. Gentleman will be aware that the London borough of Sutton did not do as well as we would have hoped in the latest inspection, which could have unlocked those resources. I understand that the area will be subject to a second inspection in October, and I am sure that my Department and my officials will be keen to work with officers of the London borough of Sutton to ensure that we can unlock that money, which could be vital in helping to provide decent homes for tenants in his constituency.
	I hope that I have addressed the matter in a measured way. I understand the frustrations and concerns that exist, but we cannot make knee-jerk, rapid decisions on such an important and complex matter. It needs to be examined in the round and fundamentally, because it has an impact on general taxpayers as well as on tenants. I am keen to ensure that we have a system for financing council housing that is fair and sustainable in the long term, and that council housing has a key role to play in the housing offer of this country in the 21st century.
	 Question put and agreed to.
	 House adjourned.